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CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

 

Target Offering: 2,000,000 Shares

of COMMON STOCK

at $0.50 per Share

 

Trxade Group, Inc., a Delaware corporation (“Trxade” or the “Company”), is
offering (the “Offering”) for sale shares of common stock of the Company (the
“Offered Shares”) to persons who qualify as “accredited investors”, as such term
is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as
amended (the “Securities Act”). We are offering the Shares on a “best efforts”
basis with no prescribed minimum. See “Summary of the Offering. There is no
minimum number of shares that must be sold for the offering to close.

 

The common stock of the Company (the “Common Stock) is listed on the OTCQB and
the Over the Counter Bulletin Board under the symbol “TRXD”. The price for the
Common Stock on the OTCQB on June 4, 2019 was $0.53 per share. The price of the
Offered Shares will be Fifty Cents ($0.50).

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING
OFFERED AND SOLD SOLELY WITHIN THE UNITED STATES EXCLUSIVELY TO ACCREDITED
INVESTORS (AS DEFINED IN RULE 501(a) OF REGULATION D UNDER THE SECURITIES ACT)
IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND SUCH LAWS.

 

Further, we were previously a shell company, AND therefore the exemption offered
pursuant to Rule 144 is not CURRENTLY available. Notwithstanding the foregoing,
HOWEVER, BECAUSE WE have filed current “Form 10 information” with the SEC
reflecting our status as an entity that is no longer a shell company, if (i) we
REMAIN subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act; AND (ii) have filed all reports and other materials required to be
filed by section 13 or 15(d) of the Exchange Act, as applicable, during the
preceding 12 months; then the securities issued in connection with this Offering
may be sold subject to Rule 144 and other applicable securities laws after one
year has elapsed from the date that we fileD “Form 10 information” with the SEC.

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage i

 

 

THIS MEMORANDUM SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION, ANY
STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

The securities offered hereby are speculative and involve a high degree of risk,
and should not be purchased by anyone who cannot afford the loss of the entire
amount of his or her investment. See “Risk Factors,” from our Form 10, as
amended (the “Form 10”), first filed with the Securities and Exchange Commission
(the “SEC”) on June 11, 2014, our Annual Report on Form 10-K for the period
ended December 31, 2017 (the “Form 10-K”) and all subsequent Quarterly Reports
on Form 10-Q (collectively, the Form 10 and the Form 10-K, Form 10-Q, and all
other public filings with the SEC are referred to hereinafter as the “Public
Filings”). The RISK FACTORS from our Public Filings and other information
therein are incorporated herein by reference. This offering is not complete
without reviewing the information presented in these documents. You can review
these documents free of charge at the SEC website, www.SEC.gov.

 

The date of this Memorandum June 4, 2019

 

This Private Placement Memorandum (the “Memorandum”) is confidential and is
intended solely for the prospective investor to whom it is delivered and does
not constitute an offer to any other person or to the public generally to
subscribe for or purchase any of the Offered Shares. The Form 10 is only correct
as of June 11, 2014, unless amended. Our Annual Report on Form 10-K for the year
ended December 31, 2018 was filed with the SEC in March 2019. Our Form 10-Q for
the Quarter Ended March 31, 2019 was filed in May 2019. Trxade is under no
obligation to update these documents other than required in our public reports
filed with the SEC. Certain information contained in this Memorandum is
proprietary to Trxade and is being submitted to prospective investors solely for
their confidential use in evaluating a potential investment in the Offered
Shares. Any duplication or redistribution of this document or dissemination of
the confidential or proprietary information contained herein without the express
consent of Trxade is strictly prohibited. Delivery of this Memorandum does not
under any circumstances constitute a representation or imply that information
set forth or incorporated by reference herein is correct as of any time
subsequent to the date hereof.

 

Certain statements contained in this Memorandum and the Public Filings,
including the exhibits thereto, constitute forward-looking statements. The use
of any of the words “anticipate”, “intend”, “continue”, “estimate”, “expect”,
“may”, “will”, “project”, “should”, “believe” and similar expressions are
intended to identify forward-looking statements. These statements involve known
and unknown risks, uncertainties and other factors that may cause actual results
or events to differ materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in those
forward-looking statements are reasonable but no assurance can be given that
these expectations will prove to be correct and such forward-looking statements
included in this Memorandum and the Public Filings, including the exhibits
thereto, should not be unduly relied upon. These statements speak only as of the
date of this Memorandum, the Public Filings, or as of the date made, as
applicable.

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage ii

 

 

These statements, as well as information otherwise provided to prospective
investors, are not guarantees of future performance and are subject to risks,
uncertainties and assumptions that are difficult to predict and may be beyond
the Company’s control. Therefore, actual results could differ materially from
those expressed or anticipated. These risks and uncertainties include the
following, and are further detailed under “Risk Factors” in our Form 10, the
Form 10-K, and the Form 10-Q. Major risks include, but are not limited to:

 

●If we do not obtain additional financing, our business, prospects, financial
condition and results of operations will be adversely affected; ●We are subject
to the “penny stock” rules which will adversely affect the liquidity of our
common stock; ●The market price for our common stock is particularly volatile,
given our status as a relatively unknown company with a small and thinly quoted
public float, limited operating history and lack of significant net revenues,
which could lead to wide fluctuations in our share price; ●A significant number
of our shares are eligible for sale and their sale or potential sale may depress
the market price of our common stock; ●We have a limited operating history and
expect to continue to incur losses for an indeterminate period of time; ●There
is a limited market for our shares and our common stock is thinly quoted, so you
may be unable to sell at or near bid prices or at all if you need to sell your
shares to raise money or otherwise desire to liquidate your shares; ●Our Chief
Executive Officer and President are also our two largest stockholders, and as a
result they can exert control over us and have actual or potential interests
that may diverge from yours; ●Problems that the Company may face in raising
additional capital; ●Uncertainty of market acceptance of the Company’s products
and services; ●Uncertainty as to the completion of announced products and
services; ●Dependence on key personnel; and ●Infringement upon proprietary
technology by competitors.

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage iii

 

 

TERMS OF THE OFFERING

 

The Company does not undertake any obligation to update or revise any
forward-looking statements contained herein for any reason, even if new
information becomes available or other events occur in the future.

 

Each prospective investor may make inquiries of Trxade with respect to its
business or any other matters relating to Trxade and an investment in the
Offered Shares, and may obtain any additional information which such person
deems relevant to an investment decision in order to obtain, clarify or verify
information regarding Trxade, whether or not contained in this Memorandum or the
Public Filings (to the extent that Trxade possesses such information or can
acquire it without unreasonable effort or expense). In connection with such
inquiry, documents which a prospective investor reasonably wishes to review will
be made available for inspection or copying upon request, subject to execution
of appropriate confidentiality agreements to maintain such information in
confidence and to return the same to the Company if the recipient does not
purchase any of the securities offered hereby. Any such inquiries or requests
for additional information or documents should be made in writing to Trxade,
addressed as follows: Trxade Group, Inc., at 3480 Land O Lakes Blvd, Land O
Lakes, FL -34639, Attention: Suren Ajjarapu, CEO. Any authorized response by
Trxade will be in writing.

 

No dealer, salesperson or any other person, other than as provided for herein,
has been authorized by the Company to give any information or to make any
representations other than those contained in this Memorandum and the Public
Filings in connection with the Offering made hereby, and if given or made, such
information or representation must not be relied upon as having been authorized
by Trxade. This Memorandum does not contain any financial projections relating
to the future financial performance of Trxade, and management of Trxade has not
prepared any such projections for use by investors in connection with this
Offering. No person is authorized to provide any financial projections or to
make any representations regarding such projections in connection with the
Offering made hereby, and if given or made, such projections or representations
must not be relied upon. Trxade disclaims any and all responsibility for
representations or warranties, express or implied, not set forth in this
Memorandum or the Public Filings or made by an executive officer of Trxade in
writing.

 

This Offering is subject to withdrawal, cancellation or modification by Trxade
without notice. Trxade reserves the right, in its sole discretion, to reject any
subscription or offer to purchase the Offered Shares, in whole or in part, for
any reason, or to elect to sell less than the number of the Offered Shares
offered hereby.

 

Prospective investors are not to construe the contents of this Memorandum or the
Public Filings as legal, investment or tax advice. Prospective investors should
be aware that the purchase of the securities offered hereby might have tax
consequences in the United States. Such consequences for investors who are
resident in, or citizens of, the United States are not described in this
Memorandum or the Public Filings. Prospective investors should consult their
advisors as to legal, investment, tax and related matters concerning any
proposed purchase of the Offered Shares and to assist such investor in making an
investment decision. In making an investment decision, investors must rely on
their own examination of Trxade and the terms of the Offering, including the
merits and risks involved. Investors should be aware that they may be required
to bear the financial risks of this investment for an indefinite period of time.

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage iv

 

 

This Memorandum contains summaries of certain provisions of documents relating
to the purchase of the Offered Shares, as well as summaries of various
provisions of relevant statutes and regulations. Such summaries do not purport
to be complete and are qualified in their entirety to reference to the texts of
the original documents, statutes and regulations that are available upon
request.

 

This Memorandum, including the Public Filings and all exhibits hereto and
thereto, should be read in its entirety by each prospective investor prior to a
decision to subscribe for the Offered Shares or the completion of subscription
documents.

 

The shares of Common stock constituting the Offered Shares have not been
registered under the Securities Act and are being offered in reliance upon the
exemptions from registration set forth in Regulation D promulgated thereunder.
Offered Shares are being offered and will be sold only to “accredited investors”
as defined in Rule 501(a) of Regulation D promulgated under the Securities Act
and any applicable state securities law. Each subscriber will be required to
complete and execute a Certificate of Accredited Investor Status and a
Subscription Agreement in the forms of Exhibit A, and EXHIBIT B, respectively,
attached hereto, to represent and to establish to the satisfaction of Trxade
that such subscriber meets one or more of the criteria for accredited investors.
In addition, each subscriber will be required to represent that the Offered
Shares will be purchased solely for his or her own account, for investment
purposes only, and not with a view to, or for resale in connection with, any
distribution. Transfer of the Offered Shares may be limited. Trxade reserves the
right to refuse a subscription for Offered Shares in its sole discretion for any
reason including a concern that the prospective investor may not meet the
requirements for accredited investors or that the Offered Shares are otherwise
an unsuitable investment for the prospective investor.

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage v

 

 

INDEX

 

General:

 

This Subscription Booklet contains documents that must be READ, EXECUTED and
RETURNED to Trxade Group, Inc. (the “Company”) if you wish to invest in the
Company. You should consult with an attorney, accountant, investment advisor or
other advisor regarding an investment in the Company and its suitability for
you.

 

If you decide to invest, please fill out, sign and return the documents
pertinent to you, as listed under each of the headings below.

 

For individuals, the documents to be returned are:

 

  ● Exhibit A: Signature Page of Securities Purchase Agreement; and         ●
Exhibit B: Purchaser Questionnaire and Suitability Statement.

 

If the Securities are to be jointly owned by individuals, the following
documents must also be returned:

 

  ● Exhibit A: Signature Page of Securities Purchase Agreement signed by both
owners; and         ● Exhibit B: A Purchaser Questionnaire and Suitability
Statement completed by each owner; and

 

For entities, the documents to be returned are:

 

●Exhibit A: Signature Page of Securities Purchase Agreement;      ●Exhibit B:
Purchaser Questionnaire and Suitability Statement; and

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage vi

 

 

Securities Purchase Procedures

 

The Company is offering up to $2,000,000 of Common Stock securities
(collectively, the “Securities”) to accredited investors only. Unless waived by
the Company in its sole discretion, the minimum investment in the Company by any
one investor is $100,000. The maximum individual subscription amount shall be
determined by the Company on a case-by-case basis at the Company’s sole
discretion. There is no minimum aggregate sale of Securities required for the
Company to begin accepting and closing sales of Securities.

 

The offering will commence on the date of this Subscription Booklet and will
expire on the earlier of the date on which the offering is fully subscribed or
October 1, 2019, unless extended at the discretion of the Company, at the
Company’s discretion. No broker-dealer will act on behalf of the Company in
offering or selling the Securities offered hereby. Offers and sales of the
Securities will be made only by Suren Ajjarapu, CEO, who will not receive any
commissions or other compensation for such services.

 

It is contemplated that one or more closings will be held in the offering and
that closings may occur on a “rolling” basis with the Company accepting sales of
Securities on an on-going basis during the term of the offering.

 

Prospective investors wishing to subscribe for Securities will be required to
complete, execute and deliver to the Company the investor’s Securities Purchase
Agreement and the other subscription documents outlined above. Each prospective
investor will also be required to deliver (simultaneously with the Securities
Purchase Agreement) a certified, cashier’s or other check acceptable to the
Company or wire of readily available funds for such prospective investor’s
entire capital contribution. The check should be payable to “Trade Group, Inc.”
Wire instructions will be available upon request.

 

Securities issued hereunder will be returned as soon as practicable accompanied
by the investor’s countersigned Securities Purchase Agreement. The Company
reserves the right to decline any investment in whole or in part or to allot to
any prospective investor less than the amount of Securities subscribed for by
such prospective investor.

 

The Securities will be offered and sold only to “accredited investors” (as
defined below) who: (a) represent, among other things, that they are acquiring
the Securities for their own account, for investment only and not with a view
toward the resale or distribution thereof, that they are aware that the
Securities have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), that their transfer rights are restricted by the
Securities Act and applicable state securities laws, and that they are aware of
the absence of a market for the Securities; (b) are investors meeting the
suitability standards hereinafter set forth, including status as an “accredited
investor”; and (c) have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of this
investment. In this regard, the Company will require as a general investor
suitability standard that each prospective investor represent that such
prospective investor meets these and other standards by executing the Purchase
Agreement and completing the Purchaser Questionnaire and Suitability Statement.

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage vii

 

 

An “accredited investor” is defined under Rule 501 of Regulation D promulgated
by the SEC under the Securities Act to include, among other categories of
investors, the following: (a) charitable, educational, literary or similar
organizations described in Section 501(c)(3) of the Internal Revenue Code,
corporations, Massachusetts or similar business trusts, or partnerships, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000; (b) an executive officer or director of the
Company; (c) a natural person whose individual net worth, or joint net worth
with such person’s spouse, at the time of purchase exceeds $1,000,000 (excluding
the value of such person’s primary residence and including certain liabilities
relating to such person’s primary residence as set forth in Rule 501 of
Regulation D); (d) a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with such person’s
spouse in excess of $300,000 in each of such years and who has a reasonable
expectation of reaching the same income level in the current year; (e) a trust,
not formed for the specific purpose of acquiring the securities offered, with
total assets in excess of $5,000,000 whose purchase is directed by a
sophisticated person as defined in Rule 506(b)(2)(ii) of Regulation D; or (f) an
entity (including an IRA) in which all of the equity owners are “accredited
investors”. Prospective investors must also represent that their investment in
the Securities is suitable for them upon the basis of all of the facts and
circumstances of their financial situation and needs and their other security
holdings.

 

The requirements described above represent minimum suitability requirements for
prospective investors and the satisfaction of such standards by a prospective
investor does not necessarily mean that the Securities are a suitable investment
for such prospective investor. Each prospective investor should make an
independent determination as to whether an investment in the Securities is
appropriate for such prospective investor. The Company may make or cause to be
made such further inquiry and obtain such additional information as it deems
appropriate with regard to the suitability of a prospective investor. The
Company may reject subscriptions in whole or in part, in its sole judgment.

 

If any representation made by a prospective investor or others acting on his,
her or its behalf misleads the Company as to the financial or other
circumstances of a particular prospective investor, or if, because of any error
or misunderstanding as to such circumstances, a copy of this Subscription
Booklet is delivered to a prospective investor who does not meet the investor
suitability standards set forth above, the delivery of this Subscription Booklet
to such prospective investor shall not be deemed to be an offer, and this
Subscription Booklet must be returned to the Company immediately.

 

All subscription documents (including all signature pages for the Securities
Purchase Agreement and completed Purchaser Questionnaire and Suitability
Statement) are to be executed and returned to Suren Ajjarapu, on behalf of
Trxade Group, Inc., at the following address:

 

Trxade Group, Inc.

3480 Land O Lakes Blvd,

Land O Lakes, FL 34639

Attention: Suren Ajjarapu, CEO.

 

Trxade Group, Inc.

Offering Memorandum and Subscription BookletPage viii

 

 

Exhibit A

 

Securities Purchase Agreement

 

See attached.

 

Trxade Group, Inc.

Offering Memorandum and Subscription Booklet

 

 

TRXADE GROUP, INC.

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement, dated as of the date below (this
“Agreement”), is entered into by and among Trxade Group, Inc. (the “Company”), a
corporation incorporated in the state of Delaware, and the persons and entities
listed on the signature page attached hereto (the “Investors”).

 

The parties hereby agree as follows:

 

1. The Securities.

 

(a) Issuance of Securities. Subject to all of the terms and conditions hereof,
the Company agrees to issue and sell to each of the Investors, and each of the
Investors severally agrees to purchase, shares of Common Stock (each, a
“Security” and, collectively, the “Securities”) for the investment amount set
forth opposite the respective Investor’s name on signature page hereto (the
“Investment Amount”). The obligations of the Investors to purchase Notes are
several and not joint. The aggregate Investment Amounts for the purchase of
Securities hereunder shall not exceed $2,000,000.

 

(b) Delivery; Use of Proceeds. The sale and purchase of the Securities shall
take place at a closing (the “Closing”) to be held at such place and time as the
Company and the Investors may determine (the “Closing Date”). At the Closing,
the Company will deliver to each of the Investors the Securities to be purchased
by such Investor, against receipt by the Company of such Investor’s Investment
Amount. The Company may conduct one or more additional closings within two years
of the Closing (each, an “Additional Closing”) to be held at such place and time
as the Company and the Investors participating in such Additional Closing may
determine (each, an “Additional Closing Date”). Proceeds of the Securities shall
be used for general corporate purposes, including the payment of a salary to the
officers of the Company.

 

2. Representations and Warranties of the Company. The Company represents and
warrants to each Investor that:

 

(a) Due Incorporation, Qualification. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted; and (iii) is
duly qualified, licensed to do business and in good standing as a foreign
corporation in each jurisdiction where such qualification or license is
required.

 

 1 

 

 

(b) Authority; Enforceability. The execution, delivery and performance by the
Company of this Agreement and Securities issued hereunder (and collectively with
the other documents referenced herein, the “Transaction Documents”) and the
consummation of the transactions contemplated hereby and thereby (i) are within
the power of the Company and (ii) have been duly authorized by all necessary
actions on the part of the Company. Each Transaction Document executed by the
Company has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally and general principles of equity.

 

(c) Non-Contravention. The execution and delivery by the Company of the
Transaction Documents executed by the Company and the performance and
consummation of the transactions contemplated thereby do not and will not (i)
violate the Company’s Certificate of Incorporation, Bylaws or other formation or
charter documents, as applicable (as amended, the “Charter Documents”), or any
material judgment, order, writ, decree, statute, rule or regulation applicable
to the Company; (ii) violate any provision of, or result in the breach or the
acceleration of, or entitle any other person to accelerate (whether after the
giving of notice or lapse of time or both), any material mortgage, indenture,
agreement, instrument or contract to which the Company is a party or by which it
is bound; or (iii) result in the creation or imposition of any lien or
encumbrance upon any property, asset or revenue of the Company.

 

(d) No Violation or Default. The Company is not in violation of or in default
with respect to (i) its Charter Documents or any material judgment, order, writ,
decree, statute, rule or regulation applicable to the Company; or (ii) any
material mortgage, indenture, agreement, instrument or contract to which the
Company is a party or by which it is bound.

 

(e) Capitalization. As of the date of this Agreement, the authorized and
outstanding capital stock of the Company is as set herein and in the Public
Filings (whichever is later) and also sets forth all outstanding options,
warrants and convertible securities of the Company outstanding as of the date
hereof, including any shares reserved for issuance under any equity incentive or
similar plan of the Company. All outstanding shares of the Company have been
duly authorized and validly issued in compliance with applicable laws, and are
fully paid and nonassessable.

 

3. Representations and Warranties of Investors. Each Investor, for that Investor
alone, represents and warrants to the Company upon the acquisition of a Security
as follows:

 

(a) Binding Obligation. Such Investor has full legal capacity, power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement and the Transaction Documents constitute valid and
binding obligations of such Investor, enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and general principles of equity.

 

 2 

 

 

(b) Securities Law Compliance. Such Investor has been advised that the
Securities and the underlying securities have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any state
securities laws and, therefore, cannot be resold unless they are registered
under the Securities Act and applicable state securities laws or unless an
exemption from such registration requirements is available. Such Investor has
not been formed solely for the purpose of making this investment and is
purchasing the Securities to be acquired by such Investor hereunder for its own
account for investment, not as a nominee or agent, and not with a view to, or
for resale in connection with, the distribution thereof, and Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. Such Investor has such knowledge and experience in
financial and business matters that such Investor is capable of evaluating the
merits and risks of such investment, is able to incur a complete loss of such
investment without impairing such Investor’s financial condition and is able to
bear the economic risk of such investment for an indefinite period of time.

 

(c) Access to Information. Such Investor has received, read carefully and
understands this Agreement and the Securities and all exhibits hereto and
thereto and has consulted its own attorney, accountant and/or investment advisor
with respect to the transactions contemplated hereby and thereby and its
suitability for such Investor. The Company has made available to such Investor,
prior to the purchase of the Securities, all Public Filings filed under the SEC,
and Investor has had the opportunity to ask questions of and receive answers
from management of the Company concerning the terms and conditions of this
Agreement and the Securities and to obtain any additional information necessary
to verify information contained in the Agreement, the Securities or otherwise
related to the financial data and business of the Company, to the extent that
such parties possess such information or can acquire it without unreasonable
effort or expense, and all such questions, if asked, have been answered
satisfactorily and all such documents, if requested, have been found to be
satisfactory. The foregoing shall not limit the Company’s representations and
warranties or such Investor’s right to rely thereon.

 

(d) Acknowledgement of Risks. Such Investor is aware and acknowledges that (a)
the Company has no operating history, and there is a high degree of risk that
the Company will be unable to execute its business strategy successfully; (b)
the Securities involve a substantial degree of risk of loss of its entire
investment; (c) such Investor, in purchasing the Securities, is relying solely
upon the advice of such Investor’s tax advisor with respect to the tax aspects
of purchasing the Securities; and (d) because there are substantial restrictions
on the transferability of the Securities it may not be possible for such
Investor to liquidate its investment readily. . Investor has reviewed the Risk
Factors and other information referenced in the 10-K, the 10-Q and the Public
Filings.

 

(e) Accredited Investor. Such Investor (a) is an “accredited investor” within
the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act,
and (b) maintains its domicile, and is not merely a transient or temporary
resident, at the address shown on the signature page hereof.

 

(f) No Public Advertising. Investor acknowledges that Investor has not seen,
received, been presented with, or been solicited by any leaflet, public
promotional meeting, newspaper or magazine article or advertisement, radio or
television advertisement, or any other form of advertising or general
solicitation with respect to the Securities.

 

 3 

 

 

(g) Transfer Restrictions. Further, Investor is aware that the Company was
previously a shell company, and therefore the exemption offered pursuant to Rule
144 is not currently available. Notwithstanding the foregoing, however, Investor
is aware that because the Company has filed current “Form 10 information” with
the Securities and Exchange Commission reflecting its status as an entity that
is no longer a shell company, if (i) the Company remains subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act; and (ii) if
the Company has filed all reports and other materials required to be filed by
section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12
months; then the Shares issued in connection with this Offering may be sold
subject to Rule 144 (and applicable holding periods) and other applicable
securities laws after one year has elapsed from the date that the Company file D
“Form 10 information” with the Securities and Exchange Commission.

 

(h) Indemnification. Investor hereby agrees to indemnify and hold harmless the
Company, its principals, the Company’s officers, directors attorneys, and
agents, from any and all damages, costs and expenses (including actual
attorneys’ fees) which they may incur: (i) by reason of P Investor’s failure to
fulfill any of the terms and conditions of this Subscription; (ii) by reason of
Investor’s breach of any of representations, warranties or agreements contained
herein (including the Purchaser Questionnaire and Suitability Statement); or
(iii) with respect to any and all claims made by or involving any person, other
than Investor personally, claiming any interest, right, title, power, or
authority in respect to the Securities. Investor further agrees and acknowledges
that these indemnifications shall survive any sale or transfer, or attempted
sale or transfer, of any portion of the Securities.

 

4. Conditions to Closing of the Investors. Each Investor’s obligations at the
Closing and each Additional Closing are subject to the fulfillment, on or prior
to the Closing Date or applicable Additional Closing Date, of all of the
following conditions:

 

(a) Representations and Warranties. The representations and warranties made by
the Company in Section 2 hereof shall have been true and correct when made, and
shall be true and correct on the Closing Date or applicable Additional Closing
Date.

 

(b) Governmental Approvals and Filings. Except for any notices required or
permitted to be filed after the Closing Date or applicable Additional Closing
Date with certain federal and state securities commissions, the Company shall
have obtained all governmental approvals required in connection with the lawful
sale and issuance of the Securities.

 

(c) Transaction Documents. The Company shall have duly executed and delivered to
the Investors the following documents: (i) this Agreement and (ii) Securities
issued hereunder.

 

 4 

 

 

5. Conditions to Obligations of the Company. The Company’s obligation to issue
and sell the Securities at the Closing and at each Additional Closing is subject
to the fulfillment, on or prior to the Closing Date or the applicable Additional
Closing Date, of the following conditions:

 

(a) Representations and Warranties. The representations and warranties made by
the applicable Investors in Section 3 hereof shall be true and correct when
made, and shall be true and correct on the Closing Date and the applicable
Additional Closing Date.

 

(b) Legal Requirements. At the Closing and at each Additional Closing, the sale
and issuance by the Company, and the purchase by the applicable Investors, of
the Securities shall be legally permitted by all laws and regulations to which
such Investors or the Company are subject.

 

6. Miscellaneous.

 

(a) Waivers; Amendments. Any provision of this Agreement and the Securities may
be amended, waived or modified only upon the written consent of the Company and
Investor.

 

(b) Nature of Investment. For the avoidance of doubt, the parties hereto
acknowledge and agree that the payment of the Investment Amount to the Company
by an Investor will be deemed to be an equity investment in the Company and will
not be a loan to or indebtedness of the Company.

 

(c) Governing Law; Arbitration, Consent to Jurisdiction, Waiver of Jury Trial.
Any action to enforce or interpret this Offering, or to resolve disputes over
this Agreement between the Company and the Investor, will be settled by
arbitration in accordance with the rules of the American Arbitration
Association. Arbitration will be the exclusive dispute resolution process, and
arbitration will be a held in Tampa, Florida. Any Party may commence arbitration
by sending a written demand for arbitration to the other Parties. The demand
will set forth the nature of the matter to be resolved by arbitration. The
Company will select the place of arbitration. The substantive law of the state
of Florida will be applied by the arbitrator to the resolution of the dispute.
The Parties will share equally all initial costs of arbitration. The prevailing
Party will be entitled to reimbursement of attorney fees, costs, and expenses
incurred in connection with the arbitration. All decisions of the arbitrator
will be final, binding, and conclusive on all Parties. Judgment may be entered
on any such decision in accordance with applicable law in any court having
jurisdiction of it. The arbitrator (if permitted under applicable law) or the
court may issue a writ of execution to enforce the arbitrator’s decision. TO THE
EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS SUBSCRIPTION, OR IN ANY WAY
CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALING OF THE PARTIES
HERETO WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT EACH MAY LEGALLY DO SO,
EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT EITHER
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE
WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

 5 

 

 

(d) Survival. The representations, warranties, covenants and agreements made
herein shall survive the execution and delivery of this Agreement.

 

(e) Transferability. The Securities shall not be transferred directly or
indirectly, by any Investor to any person (other than to persons who are and
remain affiliates of such Investor) without compliance with all applicable
securities laws.

 

(f) Successors and Assigns. Subject to the restrictions on transfer described
herein, the rights and obligations of the Company and the Investors shall be
binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.

 

(g) Transaction Expenses. Each party agrees to pay its own costs and expenses
(including attorneys’ fees) in connection with the preparation and closing of
the transactions contemplated by this Agreement and the Securities

 

(h) Entire Agreement. This Agreement together with the other Exhibits referenced
heretin constitute and contain the entire agreement among the Company and
Investors and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications among the parties, whether
written or oral, respecting the subject matter hereof.

 

(i) Notices. All notices, demands, consents, or other communications hereunder
shall in writing and faxed, mailed, emailed or delivered to each party as
follows: (i) if to a Investor, at such Investor’s address, email address, or
facsimile number set forth in the signature page attached hereto, or at such
other address as such Investor shall have furnished the Company in writing, or
(ii) if to the Company, at such address, or fax number set forth on the
signature pages hereto, or at such other address, or facsimile number as the
Company shall have furnished to the Investors in writing. All such
communications will be deemed effectively given the earlier of (i) when
received, (ii) when delivered personally, (iii) one business day after being
delivered by facsimile (with receipt of appropriate confirmation), (iv) one
business day after being deposited with an overnight courier service of
recognized standing or (v) four days after being deposited in the U.S. mail,
first class with postage prepaid.

 

(j) Severability. If any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

 6 

 

 

(k) Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same agreement. Facsimile copies of signed signature
pages will be deemed binding originals.

 

(l) Confidentiality and No-Trading. Except as required by law, the Investor
agrees that it shall keep confidential and shall not disclose or divulge any
confidential, proprietary or secret non-public information that such Investor
may obtain from the Company pursuant to financial statements, reports and other
materials submitted by the Company to such Investor pursuant to this Agreement
or otherwise, or pursuant to visitation or inspection rights granted under this
Agreement, unless such information is known, or until such information becomes
known, to the public; provided, that such Investor may disclose such information
(a) to its attorneys, accountants, consultants and other professionals to the
extent necessary to obtain their services in connection with its investment in
the Company; (b) to any prospective transferee of any Securities from such
Investor as long as such prospective transferee agrees in writing to be bound by
the provisions of this section; or (c) to any affiliate of such Investor or to a
partner, stockholder or stockholder of such Investor. Investor understands that
To the extent disclosed, the Company’s confidential information as well as the
existence of the discussions concerning the Offering and the terms of the
Offering being contemplated by the parties may be deemed material non-public
information and Investor shall not trade in the stock of the Company while
Investor is in possession of any material non-public information conveyed
hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

 7 

 

 

You hereby certify that (a) all the information contained in this Agreement is
complete and accurate and contains no material omissions and may be relied upon
by the Company, and (b) you will notify the Company in writing immediately of
any change in any of such information.

 

Amount of Security

for Which the undersigned Investor Subscribes: $ __________________

(You May Subscribe for Not Less than $100,000 unless approved by the Company)

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly signed
as of the date first above written.

 

INVESTOR (if individual):   INVESTOR (if entity):                          
Signature   Name of Entity                   By:       Name (type of print)  
Name:                Its:               Address:                                
  Street                                  
City                                           State                       Zip  
                    Email:
                                                                     

 

NOTE: If the Securities are to be jointly owned, please check the applicable box
below. The co-owner must complete and sign the Co-Owner Signature Page and the
Co-Owner Suitability Statements on the next page.

 

[  ]                Joint Tenants with Right of Survivorship

 

[  ]                Tenants-in-Common

 

[  ]                Other: ______________________

 

[Signature page for Securities Purchase Agreement]

 

   

 

 

CO-OWNER SIGNATURE PAGE

 

You hereby certify that (a) all the information contained in this Agreement is
complete and accurate and contains no material omissions and may be relied upon
by the Company, and (b) you will notify the Company in writing immediately of
any change in any of such information.

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date set
forth below.

 

CO-OWNER:           (Signature)           (Print Name)           (Date)      
Address:           Street          
City                                         State                                 Zip
      Email:                                                             

 

 -2- 

 

 

IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase
Agreement to be duly signed as of the date first above written.

 

  COMPANY:         TRXADE GROUP, INC.   a Delaware corporation         By:    
Name: Suren Ajjarapu, CEO         Trxade Group, Inc.   3480 Land O Lakes Blvd  
Land O Lakes, FL 34639         DATE:  

 

 -3- 

 

 

Exhibit B

 

Purchaser Questionnaire and Suitability Statements

 

See attached.

 

Trxade Group, Inc.

Offering Memorandum and Subscription Booklet Purchaser Questionnaire and
Suitability Statement 

 

 

CONFIDENTIAL PURCHASER QUESTIONNAIRE AND SUITABILTY STATEMENT

 

TRXADE GROUP, INC.,

a Delaware corporation

 

Private Placement of Securities

 

Ladies and Gentlemen:

 

The information contained herein is furnished to you in order that you may
determine whether the undersigned’s agreement to purchase Securities (the
“Securities”) issued by Trxade Group, Inc., a Delaware corporation (the
“Company”), may be accepted by you in light of the requirements of Section
4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 of Regulation D under the Act, and an exemption contained in the
securities laws of certain states. The undersigned prospective investor (the
“Investor”) understands that the information is needed in order to satisfy
various suitability requirements, including the requirement that you must have
reasonable grounds to believe that the Investor is an “Accredited Investor”, as
defined in Rule 501 of Regulation D (which in the case of a partnership investor
formed for the purpose of investing in the Securities requires each partner to
be an Accredited Investor), and that the Investor has knowledge and experience
in financial and business affairs such that the Investor is capable of
evaluating the merits and risks of the proposed investment. The Investor
understands that (a) you will rely on the information contained herein for
purposes of such determination, (b) the Securities distributed in connection
therewith will not be registered under the Securities Act in reliance upon the
exemption from registration afforded by Section 4(a)(2) of the Securities Act
and Rule 506 of Regulation D promulgated thereunder, (c) the Securities will not
be registered under the securities laws of any state in reliance upon a similar
exemption, and (d) this Questionnaire is not an offer of the Securities or any
other securities.

 

The Investor understands that, although this Questionnaire and the responses
provided herein will be kept confidential, you may need to present it to such
parties as you deem advisable in order to establish the applicability under any
federal or state securities laws of an exemption from registration.

 

In accordance with the foregoing, the following representations and information
are hereby made and furnished:

 

(Please answer all questions. If the answer to any question is “None” or “Not
Applicable”, please so state. Each partner of an investing partnership formed
for the purpose of investing in the Securities must submit a completed
Questionnaire.)

 

B-1

 

Trxade Group, Inc. Offering Memorandum and Subscription Booklet Purchaser
Questionnaire and Suitability Statement 

 

 

1. General Information.

 

Name of Prospective Investor: _______________________

 

State of Domicile: ____________________________

 

Type of Prospective Investor. The undersigned is:

 

[  ]              An individual

 

[  ]              A corporation

 

[  ]              A partnership or limited liability company

 

[  ]              A trust

 

[  ]              Other

 

Address. The address of the undersigned is: __________________________________

 

____________________________________________________________________ 

 

Contact Information. The contact information of the undersigned is:

 

Address: ______________________________________________________

 

______________________________________________________________ 

 

Telephone: _________________________

 

Email: _____________________________

 

Facsimile: ___________________________

 

Contact Person (if the undersigned is an entity): ________________________

 

Tax I.D. Number. If an entity, the federal tax identification number (Employer
Identification Number) of the undersigned is: ___________________________

 

B-2

 

Trxade Group, Inc. Offering Memorandum and Subscription Booklet Purchaser
Questionnaire and Suitability Statement 

 

 

Entities. If the undersigned is an entity:

 

Nature of business: ___________________________________

 

Date of inception of business: ___________________________

 

Was the undersigned formed for the specific purpose of acquiring the Securities?

 

  [  ] Yes [  ] No

 

2. Representations as to Accredited Investor Status. The undersigned has read
the definition of “Accredited Investor” from Rule 501 of Regulation D as set
forth in Exhibit A, and certifies that either (check one):

 

A. [  ] The undersigned is an “Accredited Investor” for one or more of the
following reasons:

 

[  ] (a) The undersigned is an individual (not a partnership, corporation, etc.)
whose individual net worth (excess of total assets at fair market value,
including homes (but excluding the value of the primary residence of such
individual), automobiles and personal property, over total liabilities (but
excluding the amount of indebtedness secured by the individual’s primary
residence up to its fair market value, and including the amount of any such
indebtedness in excess of such fair market value)), or joint net worth with his
or her spouse, presently exceeds $1,000,000;

 

[  ] (b) The undersigned is an individual (not a partnership, corporation, etc.)
who had an income in excess of $200,000 in each of the two most recent years, or
joint income with his or her spouse in excess of $300,000 in each of those years
(in each case including foreign income, tax exempt income and full amount of
capital gains and losses but excluding any income of other family members and
any unrealized capital appreciation) and has a reasonable expectation of
reaching the same income level in the current year;

 

[  ] (c) The undersigned is a manager, director or executive officer (e.g.,
President or any vice president in charge of a principal business unit, division
or function such as sales, administration or finance) of the Company;

 

[  ] (d) The undersigned is a corporation, partnership, Massachusetts business
trust, or non-profit organization within the meaning of Section 501(c)(3) of the
Internal Revenue Code, in each case not formed for the specific purpose of
acquiring the Securities and with total assets in excess of $5,000,000;

 

B-3

 

Trxade Group, Inc. Offering Memorandum and Subscription Booklet Purchaser
Questionnaire and Suitability Statement 

 

 

____________________________

 

____________________________

(describe entity)

 

[  ] (e) The undersigned is a trust with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the Securities, whose purchase
would be directed by a “sophisticated person” as described in Rule
506(b)(2)(ii);

 

[  ] (f) The undersigned is a revocable trust which may be amended or revoked by
the grantors, and all of the grantors satisfy the conditions of clauses (a), (b)
or (c) above and have completed copies of this Questionnaire, which copies are
delivered to the Company herewith;

 

[  ] (g) The undersigned is an entity all the equity owners of which are
“accredited investors” within one or more of the above categories. If relying
upon this category alone, each equity owner must complete a separate copy of
this Questionnaire; All equity owners are listed below:

 

_______________________________

 

_______________________________

 

_______________________________

 

_______________________________

(list all equity owners)

 

B. [  ] The undersigned is not an “Accredited Investor”.

 

3. Representations as to Sophistication. The information requested in this
Section 3 must be provided by each prospective investor that is an individual,
each individual shareholder of a prospective investor that is a corporation,
each individual partner or member of a prospective investor that is a
partnership or limited liability company, each individual grantor of a
prospective investor that is a revocable trust and each sophisticated person as
described in Rule 506(b)(2)(ii) under the Securities Act that will direct the
investment by a prospective investor that is an irrevocable trust:

 

A. General

 

Do you have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of an investment in the
Securities?

 

  [  ] Yes [  ] No

 

B-4

 

Trxade Group, Inc. Offering Memorandum and Subscription Booklet Purchaser
Questionnaire and Suitability Statement 

 

 

Do you, either alone by reason of your business or financial experience or
together with your professional advisor(s), have the capacity to protect your
own interests in connection with a purchase of the Securities?

 

  [  ] Yes [  ] No

 

Are you (or the beneficiary of the trust for which you are the fiduciary) able
to bear the economic risk of the investment, including a complete loss of the
investment?

 

  [  ] Yes [  ] No

 

Would your purchase of the Securities be for investment?

 

  [  ] Yes [  ] No

 

If not, please state the reason for which you would purchase the Securities:

 

____________________________________________________

 

By signing below, the undersigned hereby acknowledges that the representations
set forth in this Questionnaire are accurate and complete in all respects, and
undertakes to immediately notify the Company in writing regarding any material
change in the information set forth herein prior to the date and time that the
undersigned purchases any Securities. The undersigned understands that the
Company and its legal counsel will rely on the accuracy and completeness of
these representations for the purpose of determining my suitability as a
prospective investor under applicable securities laws, and that a false
representation may constitute a violation of law and that any person who suffers
damage as a result of a false representation may have a claim against me for
damages.

 

Dated:                             Authorized Signature                      
Print Name                       Print Title (if applicable)

 

B-5

 

Trxade Group, Inc. Offering Memorandum and Subscription Booklet Purchaser
Questionnaire and Suitability Statement