================================================================================


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-KSB

(x)      ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934

         For the fiscal year ended       December 31, 2007
                                   -----------------------------

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

         For the transition period from _______________ to _________________

         Commission File number      0-7473
                                ------------------


                              AMEXDRUG CORPORATION
          ------------------------------------------------------------
          (Exact name of small business issuer as specified in charter)


                 Nevada                                 95-2251025
         --------------------------------         -------------------------
         State or other jurisdiction of          (I.R.S. Employer I.D. No.)
         incorporation or organization

         8909 West Olympic Blvd., Suite 208, Beverly Hills, CA       90211
         -----------------------------------------------------    ------------
              (Address of principal executive offices)             (Zip Code)

         Issuer's telephone number,      (310) 855-0475
                                     ----------------------

         Securities registered under Section 12(b) of the Exchange Act:

         Title of each class           Name of each exchange on which registered
                None                                     None

         Securities registered under Section 12(g) of the Act:

                         Common stock, par value $0.001
                         ------------------------------
                                (Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act [ ]

Check whether the issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [x]

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

State issuer's revenues for its most recent fiscal year: $6,139,635.


                                       -1-
<PAGE>

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days.

At March 26, 2008, the aggregate market value of the voting stock held by
non-affiliates was $822,803 based upon 715,481 shares held by non-affiliates,
and the average of the bid price ($1.10 per share) and the asked price ($1.20
per share) of $1.15 per share.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

As of March 26, 2008, the registrant had 8,470,481 shares of common stock issued
and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the part
of the form 10-KSB (e.g., part I, part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or other
information statement; and (3) any prospectus filed pursuant to rule 424 (b) or
(c) under the Securities Act of 1933: None

Transitional Small Business Disclosure Format (check one) Yes [ ] No [x]










                                       -2-
<PAGE>
                                TABLE OF CONTENTS
                                                                           Page
PART I                                                                     ----
------

ITEM 1.    DESCRIPTION OF BUSINESS.........................................   4

ITEM 2.    DESCRIPTION OF PROPERTIES.......................................  16

ITEM 3.    LEGAL PROCEEDINGS...............................................  16

ITEM 4.    SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS...............  16


PART II
-------

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........  16

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.......  17

ITEM 7.    FINANCIAL STATEMENTS............................................  19

ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE........................................  34

ITEM 8A.   CONTROLS AND PROCEDURES.........................................  35

ITEM 8B.   OTHER INFORMATION...............................................  36


PART III
--------

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
           PERSONS; COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE
           ACT.............................................................  36

ITEM 10.   EXECUTIVE COMPENSATION..........................................  38

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT......................................................  39

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................  41

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K................................  42

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES..........................  43




                                       -3-
<PAGE>
                                     PART I

MANY STATEMENTS MADE IN THIS REPORT ARE FORWARD-LOOKING STATEMENTS THAT ARE NOT
BASED ON HISTORICAL FACTS. ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
REPORT REFLECT MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND
INVOLVE RISKS AND UNCERTAINTIES. BECAUSE THESE FORWARD-LOOKING STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES, THERE ARE IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE
FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS MAY VARY MATERIALLY.

-------------------------------------------------------------------------------

                         ITEM 1. DESCRIPTION OF BUSINESS

-------------------------------------------------------------------------------

General

Amexdrug Corporation, a Nevada corporation, is a holding company. It is located
at 8909 West Olympic Boulevard, Suite 208, Beverly Hills, California 90211. Its
phone number is (310) 855-0475. Its fax number is (310) 855-0477. Its website is
www.amexdrug.com. Shares of Amexdrug common stock are traded on the OTC Bulletin
Board under the symbol AXRX.OB. The President of Amexdrug has had experience
working in the pharmaceutical industry for the past 27 years.

Amexdrug Corporation, through its wholly-owned subsidiaries, Dermagen, Inc.,
Allied Med, Inc., Royal Health Care, Inc. and BioRx Pharmaceuticals, Inc. is a
rapidly growing pharmaceutical and cosmeceutical company specializing in the
research and development, manufacturing and distribution of pharmaceutical
drugs, cosmetics and distribution of prescription and over-the-counter drugs,
private manufacturing and labeling and a quality control laboratory. At Amexdrug
Corporation, it is our anticipation to give our clientele the opportunity to
purchase cost effective products while maximizing the return of investments to
our shareholders.

Amexdrug Corporation distributes its products through its subsidiaries,
Dermagen, Inc., Allied Med, Inc., Royal Health Care, Inc. and BioRx
Pharmaceuticals, Inc. primarily to independent pharmacies and secondarily to
small and medium-sized pharmacy chains, alternative care facilities and other
wholesalers and retailers in the state of California.

Amexdrug Corporation was initially incorporated under the laws of the State of
California on April 30, 1963 under the name of Harlyn Products, Inc. Harlyn
Products, Inc. was engaged in the business of selling jewelry to department
stores and retail jewelry stores until the mid-1990s.

The name of the Company was changed to Amexdrug Corporation in April 2000 to
reflect the change in the Company's business to the sale of pharmaceutical
products. The officers and directors of the Company also changed in April 2000.
The domicile of the Company was changed from California to Nevada in December
2001. At that time the Company changed its fiscal year end from June 30 to
December 31.

References in this report to "we," "our," "us," the "Company" and "Amexdrug"
refer to Amexdrug Corporation and also to our subsidiaries, Allied Med, Inc.,
Dermagen, Inc., Royal Health Care, Inc. and BioRx Pharmaceuticals, Inc. where
appropriate.

                                      -4-
<PAGE>

Amexdrug currently has 50,000,000 shares of authorized common stock $.001 par
value, of which 8,470,481 are issued and outstanding.

Significant acquisitions

                                Allied Med, Inc.
                                ----------------

On December 31, 2001, Amexdrug acquired all of the issued and outstanding common
shares of Allied Med, Inc., an Oregon corporation in a share exchange in a
related party transaction.

Allied Med, Inc., was formed as an Oregon corporation in October 1997 to operate
in the pharmaceutical wholesale business of selling a full line of brand name
and generic pharmaceutical products, over-the-counter (OTC) drug and non-drug
products and health and beauty products to independent and chain pharmacies,
alternative care facilities and other wholesalers.

Amexdrug has assumed the operations of Allied Med, and Amexdrug intends to build
on the wholesale pharmaceutical operations of Allied Med.

The accompanying financial information includes the operations of Allied Med for
all periods presented and the operations of Amexdrug Corporation from April 25,
2000.

                                 Dermagen, Inc.
                                 --------------

Amexdrug completed its purchase of Dermagen, Inc. on October 7, 2005. Dermagen,
Inc. is now an operating subsidiary of Amexdrug. The acquisition of Dermagen,
Inc. is not considered to be an acquisition of an significant amount of assets
which would require audited financial statements of Dermagen, Inc.

Dermagen, Inc. is a growing manufacturing company specializing in the
manufacturing and distribution of certain pharmaceuticals, medical devices,
health and beauty products. Dermagen, Inc. has a U.S.-FDA registered and state
FDA approved manufacturing facility licensed to develop high margin skin and
novel health and beauty products for niche markets. Dermagen's competitive
advantage is in its superior product research and development for large leading
domestic and international companies.

                            Royal Health Care Company
                            -------------------------

In October 2003, Allied Med, Inc. acquired 100% of the assets of Royal Health
Care Company. Royal Health Care Company is a health and beauty company which has
sold specially manufactured facial and body creams, arthritic pain relief
medications and an exclusive patented hair care product to pharmacies, beauty
salons, beauty supply stores and other fine shops. Royal Health Care Company
uses the highest quality ingredients for the finest quality products. Each
product has been formulated with the essential ingredients and plant extracts to
achieve optimum potential and quality. Royal Health Care Company products are
manufactured by Dermagen, Inc. in an FDA approved manufacturing facility.

The Royal Health Care Company  assets  acquired  include the "Royal  Health Care
Company"  name,  logo,  and  related   trademarks,   all  formulas  to  products
manufactured  for sale under the Royal Health Care Company  name,  and the Royal
Health Care Company list of customers.  These intellectual  property rights were
acquired  without  cost from a company in which Jack  Amin's wife is a principal
shareholder. Mr. Amin is the CEO and Chairman of Amexdrug Corporation and Allied
Med, Inc.  Management believes this acquisition will provide the Company with an
opportunity  to increase the number of products sold by the Company,  and expand
the Company's customer base.


                                      -5-
<PAGE>

On October 28, 2004, Amexdrug formed a new subsidiary, Royal Health Care, Inc.
as a Nevada corporation. Royal Health Care, Inc. was formed to manufacture and
sell health and beauty products.

                              BioRx Pharmaceuticals
                              ---------------------

On November 8, 2004, Amexdrug formed a new subsidiary, BioRx Pharmaceuticals,
Inc. as a Nevada corporation. BioRx Pharmaceuticals, Inc. is committed to offer
over the counter (OTC) products that are recommended with trust and faith by
physicians, primarily podiatrists and dermatologists. The focus and mission of
BioRx Pharmaceuticals, Inc. is to create, develop and manufacture products to
help ease pain and restore and maintain the overall well-being of our customers.
We strive for high performance and quality. Our commitment is to offer natural
and OTC products that are recommended with confidence by doctors and pharmacists
and that the customer can use with pleasure. Our compliance program is
diligently followed through the Company. BioRx Pharmaceuticals, Inc. maintains
high ethics for animal welfare and our products are never tested on animals. All
products are made in the USA.

A total of nine products have been manufactured for sale by BioRx
Pharmaceuticals, Inc., and a total of ten products are under different stages of
development. These over-the-counter and natural products are effective for
treatment of fungus, arthritis, sunburn protection and for healthy feet and
nails. BioRx Pharmaceuticals is planning to sell these products to national
chain drugstores, sport chain stores, natural food markets and other mass
markets. These products will be marketed under the names of Sponix and Bactivex,
and will be sold under the name of BioRx Pharmaceuticals.

Industry trends

                      Pharmaceutical and healthcare markets

According to IMS Health, a company specializing in information services for the
pharmaceutical and health care industries, the United States is the world's
largest pharmaceutical market, with 2000 sales of $150 billion, including
diagnostics and over-the-counter drugs. That figure is expected to increase
after 2000 at a projected compound annual growth rate of 11.8%. This continued
growth rate of the sales of pharmaceutical products was attributed to a number
of factors including:

           . the value added by the introduction of new drugs into the
             marketplace, which more than offsets the value lost by medications
             losing patent protection;
           . new patterns of drug lifestyle management, resulting in higher
             sales occurring earlier in the life cycle of a medication;
           . increased money spent on direct-to-consumer marketing initiatives;
             and
           . an unprecedented period of investment by pharmaceutical companies
             worldwide.

                                      -6-
<PAGE>

Amexdrug believes that, currently, the pharmaceutical and health care product
markets are serviced primarily by traditional full-line wholesalers.

                                    Internet

The Internet has emerged as the fastest growing communications medium in history
and is dramatically changing how businesses and individuals communicate and
share information. The Internet has created new opportunities for conducting
commerce, such as business-to-consumer and person-to-person e-commerce.
Recently, the widespread adoption of intranets and the acceptance of the
Internet as a business communications platform has created a foundation for
business-to-business e-commerce that offers the potential for organizations to
streamline complex processes, lower costs and increase productivity.
Internet-based business-to-business e-commerce has experienced significant
growth. According to Gartner Group, worldwide business-to-business Internet
revenue was $433.3 billion in 2000. Significant growth in the industry has been
forecasted. Amexdrug hopes, although it cannot guarantee, that it will benefit
from this growth.

The dynamics of business-to-business e-commerce relationships differ
significantly from those of other e-commerce relationships. Business-to-
business e-commerce solutions frequently automate processes that are fundamental
to a business' operations by replacing various paper-based transactions with
electronic communications. In addition, business-to-business e-commerce
solutions must often be integrated with a customer's existing systems, a process
that can be complex, time-consuming and expensive. Consequently, selection and
implementation of a business-to-business e-commerce solution represents a
significant commitment by the customer, and the costs of switching solutions are
high. In addition, because business transactions are typically recurring and
non-discretionary, the average order size and lifetime value of a
business-to-business e-commerce customer is generally greater than that of a
business-to-consumer e-commerce customer. These solutions are likely to be most
readily accepted by industries characterized by a large number of buyers and
sellers, a high degree of fragmentation among buyers, sellers or both,
significant dependence on information exchange, large transaction volume and
user acceptance of the Internet.

Objectives and strategy

Amexdrug's key business objective is to become a leading full-line wholesale
distributor of pharmaceuticals, over-the-counter products, health and beauty
care products and nutritional supplements, with an emphasis on online sales.

To accomplish this objective, Amexdrug plans to:

           . market its name, products and services to create brand recognition
             and generate and capture traffic on its websites;
           . provide quality products at competitive prices and efficient
             service;
           . develop strategic relationships that increase Amexdrug's product
             offerings; and
           . attract and retain exceptional employees.



                                      -7-
<PAGE>

Sales and marketing, customer service and support

Our products are sold both through traditional wholesale distribution lines and
e-commerce venues, including our website, www.amwrx.com. We believe our
e-commerce, business-to-business model will allow the Company to leverage its
existing wholesale distribution business, thus increasing its ability to
effectively market and distribute its products. The Company uses a variety of
programs to stimulate demand for its products and increase traffic to its
websites, including a direct sales force, telemarketing, blast faxing and
advertising.

                                  Direct sales

The Company maintains employees to act as its direct sales force to target
organizations that buy and sell the products it carries.

                                  Telemarketing

The Company maintains an in-house telemarketing group for use in customer
prospecting, lead generation and lead follow-up.

                                  Blast faxing

The Company has an automated system which it uses to fax weekly updates to its
customers informing them of special offers during the week.

                                   Advertising

The Company advertises in trade journals, and at trade shows, and the Company
will seek to engage in co-branding arrangements in the future. In addition to
strategic agreements and traditional advertising, the Company, will, as revenue
allows, implement online sales and marketing techniques in an attempt to
increase brand recognition and direct traffic to its website. Some of these
techniques may include banner ads on search engine websites and Internet
directories, direct links from healthcare home pages, and mass e-mailings.

                          Customer service and support

Amexdrug believes that it can establish and maintain long-term relationships
with its customers and encourage repeat visits if, among other things, the
Company has excellent customer support and service. The Company currently offers
information regarding its products and services and answers customer questions
about the ordering process, and investigates the status of orders, shipments and
payments. A customer can access the Company by fax or e-mail by following
prompts located on the Company's website or by calling the Company's toll-free
telephone line.

                              Promotion of website

As revenue allows, the Company will promote, advertise and increase recognition
of its website through a variety of marketing and promotional techniques,
including:

           . developing co-marketing agreements with major online sites and
             services;
           . enhancing online content and ease of use of its website;
           . enhancing customer service and technical support;

                                      -8-
<PAGE>

           . advertising in trade journals and at industry trade shows;
           . conducting an ongoing public relations campaign; and
           . developing other business alliances and partnerships.

Distribution

The Company distributes its Allied Med products from its facility in Beverly
Hills, California. Dermagen, Inc. manufactures and distributes its products from
Fullerton, California. The Company fills orders with a combination of existing
inventory and products it orders from suppliers. Currently, customers are
receiving their products within 24 to 48 hours of order placement. As funds
allow, the Company will increase its in-house inventory of products to allow for
shorter delivery times.

Purchasing and Manufacturing

Allied Med, Inc. purchases its products primarily from manufacturers and
secondarily from other wholesalers and distributors. Allied Med's purchasing
department constantly monitors the market to take advantage of periodic volume
discounts, market discounts and pricing changes. Dermagen, Inc. purchases its
raw materials from suppliers, and manufactures its products in Fullerton,
California for its customers.

Technology and security

The Company website is hosted and maintained by a third party. This provider
delivers a secure platform for server hosting, including various safety features
to protect the information residing in its servers. Moreover, the Company does
not release information about its customers to third parties without the prior
written consent of its customers unless otherwise required by law.

Notwithstanding these precautions, the Company cannot assure that the security
mechanisms will prevent security breaches or service breakdowns. Despite the
implemented security measures, servers can be vulnerable to computer viruses,
physical or electronic break-ins or other similar disruptions. Such a disruption
could lead to interruptions or delays in service, loss of data, or an inability
to accept and fulfill online customer orders. Any of these events could
materially affect the Company's business.

Management information system

The Company's information system is maintained on an IBM AS 400 platform. The
accounting information for sales, purchases, perpetual inventory transactions,
cash receipts and disbursements and sophisticated management reports are
provided timely for analytical and bookkeeping purposes. Also, the order entry
system was designed specifically for the Company and allows its customers to
order product 24 hours per day either via fax, internet or phone modem. The
system provides data to management enabling it to review sales trends and
customer base, monitor inventory levels, credit and collection issues, and
purchasing frequency and cost anticipation. Communication and availability of
data is possible through a local area network ring.

Competition

Amexdrug faces strong competition both in price and service from national,
regional and local full-line, short-line and specialty wholesalers, service
merchandisers, self-warehousing chains and from manufacturers engaged in direct


                                      -9-
<PAGE>

distribution. Many of our current and potential competitors have longer
operating histories and much larger customer bases than we have. In addition,
many of our competitors have greater brand recognition and significantly greater
financial, marketing and other resources. To compete successfully, we have had
to constantly monitor our competitive situation and develop strategies to allow
us to compete with other companies who are able to:

           . secure  merchandise  from vendors on more favorable terms;
           . devote greater resources to marketing and promotional campaigns;
             and
           . adopt more aggressive pricing or inventory availability policies.

In addition, many of our competitors have developed or may be able to develop
e-commerce operations that compete with our e-commerce operations, and may be
able to devote substantially more resources to website development and systems
development than we do. The online commerce market is new, rapidly evolving and
intensely competitive. The Company expects competition to intensify in the
future because barriers to entry are minimal, and current and new competitors
can launch new websites at relatively low cost. The Company believes that the
critical success factors for companies seeking to create Internet
business-to-business e-commerce solutions include the following:

           . breadth  and depth of product  offerings;
           . brand  recognition;
           . depth of existing customer base; and
           . ease of use and convenience.

Unlike other well-publicized product categories such as online book or compact
disc retailing, there is no current market leader in its online business-to-
business market segment. The Company's immediate goal is to position itself as a
leading business-to-business e-commerce and online trade exchange provider for
pharmaceuticals, over-the-counter products, health and beauty care products and
nutritional supplements. To that end, we believe that our early entry into the
online market may enable us to establish critical competitive advantages over
future competitors. We believe that such competitive advantages include:

           . the establishment of a recognizable brand;
           . the development of online marketing and media relationships;
           . the development of important relationships with manufacturers,
             distributors, wholesalers and content providers; and
           . exposure to an existing customer base.

However, competitive pressures created by any one of its current or future
competitors, or by its competitors collectively, could materially affect the
Company's business. We believe that the principal competitive factors in its
market are and will be:

           . brand recognition          . customer  service
           . speed and accessibility    . reliability and speed of
           . quality of site content      fulfillment
           . convenience                . price
           . selection


                                      -10-
<PAGE>

Government regulations and legal uncertainties

                              Healthcare regulation
                              ---------------------

The manufacturing, packaging, labeling, advertising, promotion, distribution and
sale of most of the products we distribute are subject to regulation by numerous
governmental agencies, particularly the United States Food and Drug
Administration, which regulates most of the products we distribute under the
Federal Food, Drug and Cosmetic Act, and the United States Federal Trade
Commission, which regulates the advertising of many of the products we
distribute under the Federal Trade Commission Act. The products we distribute
are also subject to regulation by, among other regulatory agencies, the Consumer
Product Safety Commission, the United States Department of Agriculture, the
United States Department of Environmental Regulation and the Occupational Safety
and Health Administration. The manufacturing, labeling and advertising of the
products we distribute is also regulated by the Occupational Safety and Health
Administration through various state and local agencies.

Furthermore, Amexdrug and/or its customers are subject to extensive licensing
requirements and comprehensive regulation governing various aspects of the
healthcare delivery system, including the so called "fraud and abuse" laws. The
fraud and abuse laws preclude:

           . persons from soliciting, offering, receiving or paying any
             remuneration in order to induce the referral of a patient for
             treatment or for inducing the ordering or purchasing of items or
             services that are in any way paid for by Medicare or Medicaid, and
           . physicians from making referrals to certain entities with which
             they have a financial relationship.

The fraud and abuse laws and regulations are broad in scope and are subject to
frequent modification and varied interpretations. Significant criminal, civil
and administrative sanctions may be imposed for violation of these laws and
regulations.

The Company's advertising of dietary supplement products is also subject to
regulation by the Federal Trade Commission under the Federal Trade Commission
Act, in addition to state and local regulation. The Federal Trade Commission Act
prohibits unfair methods of competition and unfair or deceptive acts or
practices in or affecting commerce. The Federal Trade Commission Act also
provides that the dissemination or the causing to be disseminated of any false
advertisement pertaining to drugs or foods, which would include dietary
supplements, is an unfair or deceptive act or practice. Under the Federal Trade
Commission's Substantiation Doctrine, an advertiser is required to have a
"reasonable basis" for all objective product claims before the claims are made.

Failure to adequately substantiate claims may be considered either deceptive or
unfair practices. Pursuant to this Federal Trade Commission requirement, the
Company is required to have adequate substantiation for all material advertising
claims made for its products.

The Company may be subject to additional laws or regulations by the Food and
Drug Administration or other federal, state or foreign regulatory authorities,
the repeal of laws or regulations which the Company considers favorable, such as
the Dietary Supplement Health and Education Act of 1994, or more stringent


                                      -11-
<PAGE>

interpretations of current laws or regulations, from time to time in the future.
We cannot predict the nature of such future laws, regulations, interpretations
or applications, nor can we predict what effect additional governmental
regulations or administrative orders, when and if promulgated, would have on our
business in the future. The Food and Drug Administration or other governmental
regulatory bodies could, however, require the reformulation of certain products
to meet new standards, the recall or discontinuance of certain products not able
to be reformulated, imposition of additional record keeping requirements,
expanded documentation of the properties of certain products, expanded or
different labeling and scientific substantiation. Any or all of such
requirements could have a material and adverse effect on our business.

The products we distribute function within the structure of the healthcare
financing and reimbursement system of the United States. As a result of a wide
variety of political, economic and regulatory influences, this system is
currently under intense scrutiny and subject to fundamental changes. In recent
years, the system has changed significantly in an effort to reduce costs. These
changes include increased use of managed care, cuts in Medicare, consolidation
of pharmaceutical and medical-surgical supply distributors, and the development
of large, sophisticated purchasing groups. In addition, a variety of new
approaches have been proposed to continue to reduce cost, including mandated
basic healthcare benefits and controls on healthcare spending through
limitations on the growth of private health insurance premiums and Medicare and
Medicaid spending. The Company anticipates that Congress and state legislatures
will continue to review and assess alternative healthcare delivery systems and
payment methods and that public debate with respect to these issues will likely
continue in the future. Because of uncertainty regarding the ultimate features
of reform initiatives and their enactment and implementation, the Company cannot
predict which, if any, of such reform proposals will be adopted, when they may
be adopted, or what impact they may have on the Company. The Company expects the
healthcare industry to continue to change significantly in the future. Some of
these changes, such as a reduction in governmental support of healthcare
services or adverse changes in legislation or regulations governing the privacy
of patient information, or the delivery of pricing of pharmaceuticals and
healthcare services or mandated benefits, may cause healthcare industry
participants to greatly reduce the amount of the Company's products and services
they purchase or the price they are willing to pay for the products we
distribute. Changes in pharmaceutical manufacturers' pricing or distribution
policies could also significantly reduce our income.

While the Company uses its best efforts to adhere to the regulatory and
licensing requirements, as well as any other requirements affecting the products
we distribute, compliance with these often requires subjective legislative
interpretation. Consequently, we cannot assure that our compliance efforts will
be deemed sufficient by regulatory agencies and commissions enforcing these
requirements. Violation of these regulations may result in civil and criminal
penalties, which could materially and adversely affect our operations.

                               Internet regulation
                               -------------------

Few laws currently regulate the Internet. Because of the Internet's popularity
and increasing use, new laws and regulations may be adopted. Such laws and
regulations may cover issues such as:


                                      -12-
<PAGE>

           . user privacy                       . distribution
           . pricing                            . taxation
           . content                            . characteristics and quality of
                                                  products
           . copyrights                         . services

Laws and regulations directly applicable to electronic commerce or Internet
communications are becoming more prevalent. We believe that our use of third
party material on our website is permitted under current provisions of copyright
law. Because legal rights to certain aspects of Internet content and commerce
are not clearly settled, our ability to rely upon exemptions or defenses under
copyright law is uncertain. Also, although not yet enacted, Congress is
considering laws regarding Internet taxation. In addition, various jurisdictions
already have enacted laws that are not specifically directed to electronic
commerce but that could affect its business. The applicability of many of these
laws to the Internet is uncertain and could expose the Company to substantial
liability. Any new legislation or regulation regarding the Internet, or the
application of existing laws and regulations to the Internet, could materially
and adversely affect the Company. If the Company were alleged to violate
federal, state or foreign, civil or criminal law, even if the Company could
successfully defend such claims, it could materially and adversely affect the
Company.

Additionally, several telecommunications carriers are seeking to have
telecommunications over the Internet regulated by the Federal Communications
Commission in the same manner as other telecommunications services. Furthermore,
local telephone carriers have petitioned the Federal Communications Commission
to regulate Internet service providers and online service providers in a manner
similar to long distance telephone carriers and to impose access fees on such
providers. If either of these petitions are granted, the costs of communicating
on the Internet could increase substantially. This, in turn, could slow the
growth of use of the Internet. Any such legislation or regulation could
materially and adversely affect its business, financial condition and operating
results.

Proprietary rights

We believe that protecting the Company's trademarks and registered domain name
is important to our business strategy of building strong brand name recognition
and that such trademarks have significant value in the marketing of the
Company's products. To protect our proprietary rights, the Company will rely on
copyright, trademark and trade secret laws, confidentiality agreements with
employees and third parties, and license agreements with consultants, vendors
and customers. Despite such protections, however, we may be unable to fully
protect our intellectual property.

Dependence on major suppliers

During the year ended December 31, 2007, purchases from two suppliers accounted
for 65% and 19% of total purchases, respectively. Accounts payable to these
suppliers accounted for 8% and 68% of the total accounts payable balance as of
December 31, 2007. During the year ended December 31, 2006, purchases from the
same two suppliers accounted for 47% and 27% of our total purchases,
respectively. Accounts payable to these two suppliers accounted for 12% and 54%
of the total accounts payable balance as of December 31, 2006. We presently
enjoy a good relationship with our suppliers. If for any reason our business
with our suppliers was interrupted or discontinued in the future, we would be


                                      -13-
<PAGE>

able to acquire most, if not all, of the same products from other suppliers at
similar competitive prices. However, the loss of our largest supplier could have
a potential negative effect upon our future operations.

Dependence on major customers

Two customers accounted for 10% or more of our sales during the year ended
December 31, 2007. No customers accounted for 10% or more of our sales during
the year ended December 31, 2006. They accounted for 26.4% and 11.8% of our 2007
sales, respectively.

Employees

The Company currently employs three full time and three part time employees.
Labor unions do not represent any of these employees. The Company considers its
employee relations to be good. Competition for qualified personnel in its
industry is intense, particularly for technical staff responsible for marketing,
advertising, web development, and general and administrative activities.

Employees will be permitted to participate in employee benefit plans of the
Company that may be in effect from time to time, to the extent eligible.

Physical facilities

The Company's principal executive offices and its Allied Med, Inc. operations
are located in Beverly Hills, California. The Company leases approximately 800
square feet of office space for approximately $1,061 per month. This space is
leased on a month to month basis. The Company believes this space will be
sufficient for at least the next twelve months.

The Company's Dermagen, Inc. operations are currently located at 2500 East
Fender Avenue, Building IJK, Fullerton, California in approximately 6,000 square
feet. The monthly lease payment is approximately $3,750, and the lease expires
in September 2008. The Company intends to renew the lease for an additional
year. The Company believes this space will be sufficient for at least the next
twelve months.

Company history prior to the acquisition of Allied Med, Inc.

The Company was incorporated under the laws of the State of California on April
30, 1963 with authorized common stock of 10,000,000 shares at a par value of
$.10 and 1,000,000 preferred shares with a par value of $1.00 under the name of
Harlyn Products, Inc. Harlyn Products, Inc. was engaged in the business of
selling jewelry to department stores until the mid-1990s.

Solely for the purpose of changing domicile from California to Nevada, on
December 12, 2001, Amexdrug Corporation, a California corporation, entered into
a certain Merger Agreement with a newly formed, wholly-owned subsidiary Nevada
corporation named Amexdrug Corporation. The Nevada corporation had been
incorporated on December 4, 2001. As a result of the merger, which became
effective on December 17, 2001, the Company became a Nevada corporation and the
separate existence of the California corporation ceased. At the time of the
merger, the Company changed its fiscal year end from June 30 to December 31.



                                      -14-
<PAGE>

Asset acquisitions following the acquisition of Allied Med, Inc.

In December 2002, Jack Amin's wife contributed four undeveloped parcels of real
property to Allied Med, Inc. as an additional capital contribution to the
Company. In October 2003, Jack Amin's wife contributed an additional four
undeveloped parcels of real property to Allied Med, Inc. as an additional
capital contribution to the Company. These eight undeveloped parcels of real
property were subsequently transferred by Allied Med, Inc. in 2004 to a third
party as part of a litigation settlement.

In October 2003, Allied Med, Inc. acquired 100% of the assets of Royal Health
Care Company. Royal Health Care Company is a health and beauty company which has
sold specially manufactured facial and body creams, arthritic pain relief
medications and an exclusive patented hair care product to pharmacies, beauty
salons, beauty supply stores and other fine shops. Royal Health Care Company
uses the highest quality ingredients for the finest quality products. Each
product has been formulated with the essential ingredients and plant extracts to
achieve optimum potential and quality. Royal Health Care Company products are
manufactured by a third party in an FDA approved manufacturing facility.

The Royal Health Care Company assets acquired include the "Royal Health Care
Company" name, logo, and related trademarks, all formulas to products
manufactured for sale under the Royal Health Care Company name, and the Royal
Health Care Company list of customers. These intellectual property rights were
acquired without cost from a company in which Jack Amin's wife is a principal
shareholder. Mr. Amin is the CEO and Chairman of Amexdrug Corporation and Allied
Med, Inc. Management believes this acquisition will provide the Company with an
opportunity to increase the number of products sold by the Company, and expand
the Company's customer base.

Amexdrug completed its purchase of Dermagen, Inc. on October 7, 2005 with
Amexdrug paying $70,000 cash to the Dermagen, Inc. shareholders. Dermagen, Inc.
is now an operating subsidiary of Amexdrug.

Dermagen, Inc. is a rapidly growing manufacturing company specializing in the
manufacturing and distribution of certain pharmaceuticals, medical devices,
health and beauty products. Dermagen has a U.S.-FDA registered and state FDA
approved manufacturing facility licensed to develop high margin skin and novel
health and beauty products for niche markets. Our competitive advantage is in
our superior product research and development for large leading domestic and
international companies.

New subsidiaries formed

On October 28, 2004, Amexdrug formed a new subsidiary, Royal Health Care, Inc.
as a Nevada corporation. Royal Health Care, Inc. was formed to manufacture and
sell health and beauty products. Currently, Royal Health Care, Inc. has no
assets, liabilities, or operations.

On November 8, 2004, Amexdrug formed a new subsidiary, BioRx Pharmaceuticals,
Inc. as a Nevada corporation. BioRx Pharmaceuticals, Inc. was formed for the
purpose of repacking and selling generic and branded pharmaceuticals. Currently,
BioRx Pharmaceuticals, Inc. has assets, liabilities, and operations.



                                      -15-
<PAGE>

 ------------------------------------------------------------------------------

                        ITEM 2. DESCRIPTION OF PROPERTIES

 ------------------------------------------------------------------------------

Operating facilities

The Company's Dermagen, Inc. operations are currently located at 2500 East
Fender Avenue, Building IJK, Fullerton, California in approximately 6,000 square
feet. The monthly lease payment is approximately $3,750, and the lease expires
in September 2008. The Company intends to renew the lease for an additional
year. The Company believes this space will be sufficient for at least the next
twelve months. The lease is with an unrelated third party.

Executive offices and Allied Med operations

Amexdrug's executive offices and its Allied Med operations are presently located
at 8909 W. Olympic Boulevard, Suite 208, Beverly Hills, California 90211, and
consist of three offices and a reception area comprising approximately 800
square feet. Amexdrug leases its executive facilities on a month to month basis
under an oral lease agreement from an unrelated third party. The monthly lease
payment under this lease is approximately $1,061. The Company believes this
space will be sufficient for at least the next twelve months.


 ------------------------------------------------------------------------------

                            ITEM 3. LEGAL PROCEEDINGS

 ------------------------------------------------------------------------------

Amexdrug is not presently a party to any material pending legal proceedings. To
the best of Amexdrug's knowledge, no governmental authority or other party has
threatened or is contemplating the filing of any material legal proceeding
against Amexdrug.

-------------------------------------------------------------------------------

          ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

-------------------------------------------------------------------------------

No matter was submitted to a vote of our security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.


                                     PART II

-------------------------------------------------------------------------------

        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

-------------------------------------------------------------------------------

Market information

Our common stock is presently traded in the over-the-counter market and quoted
on the National Association of Securities Dealers' OTC Bulletin Board under the
ticker symbol "AXRX.OB". The shares are thinly traded and a limited market
presently exists for the shares. The following table describes, for the


                                      -16-
<PAGE>

respective periods indicated, the prices of Amexdrug common stock in the
over-the-counter market, based on inter-dealer bid prices, without retail
mark-up, mark-down or commissions and may not necessarily represent actual
transactions. The quotations have been provided by market makers in common stock
and/or Pink Sheets LLC.

Quarter ended                 High bid          Low bid
-------------                 --------          -------
March 31, 2006                 $2.25             $2.00
June 30, 2006                  $2.25             $1.80
September 30, 2006             $1.80             $1.80
December 31, 2006              $1.80             $1.70
March 31, 2007                 $1.70             $1.20
June 30, 2007                  $1.25             $1.20
September 30, 2007             $1.45             $1.20
December 31, 2007              $1.20             $1.20

Holders

The number of record holders of Amexdrug's common stock as of March 26, 2008 is
approximately 190.

Dividends

Amexdrug has not declared any cash dividends with respect to its common stock
during the last two fiscal years, and we do not intend to declare dividends in
the foreseeable future. There are no material restrictions limiting, or that are
likely to limit, Amexdrug's ability to pay dividends on our securities, except
for any applicable limitations under Nevada corporate law.

Recent sales of unregistered securities

During the past three years, Amexdrug has not sold any shares of its common
stock without registration under the Securities Act of 1933, except for the
following:

On March 15, 2005, the wife of Amexdrug's President converted approximately
$75,000 in loans that she had made to Amexdrug or its subsidiaries to 421,083
shares of Amexdrug common stock at the then current market price of
approximately $0.18 per share. The shares were issued without registration
pursuant to Section 4(2) of the Securities Act of 1933 for a transaction not
involving any public offering. The certificate representing the shares was given
a restricted legend.

-------------------------------------------------------------------------------

        ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

-------------------------------------------------------------------------------

Overview

Amexdrug Corporation is located at 8909 West Olympic Boulevard, Suite 208,
Beverly Hills, California 90211. Its phone number is (310) 855-0475. Its fax
number is (310) 855-0477. Its website is www.amexdrug.com. Shares of Amexdrug
common stock are traded on the OTC Bulletin Board under the symbol AXRX.OB. The
President of Amexdrug has had experience working in the pharmaceutical industry
for the past 27 years.


                                      -17-
<PAGE>

Amexdrug Corporation, through its wholly-owned subsidiaries, Dermagen, Inc.,
Allied Med, Inc., Royal Health Care, Inc. and BioRx Pharmaceuticals, Inc. is a
rapidly growing pharmaceutical and cosmeceutical company specializing in the
research and development, manufacturing and distribution of pharmaceutical
drugs, cosmetics and distribution of prescription and over-the-counter drugs,
private manufacturing and labeling and a quality control laboratory. At Amexdrug
Corporation, it is our anticipation to give our clientele the opportunity to
purchase cost effective products while maximizing the return of investments to
our shareholders.

Amexdrug Corporation distributes its products through its subsidiaries,
Dermagen, Inc., Allied Med, Inc., Royal Health Care, Inc. and BioRx
Pharmaceuticals, Inc. primarily to independent pharmacies and secondarily to
small and medium-sized pharmacy chains, alternative care facilities and other
wholesalers and retailers in the state of California.

BioRx Pharmaceuticals, Inc. is a proud member of the National Association of
Chain Drug Stores (NACDS). BioRx Pharmaceuticals, Inc. has developed numerous
unique innovative products in the industry under the names Sponix and Bactivex.

We have introduced six pharmaceutical over the counter (OTC) and natural
products in 2007 and plan to add four more products, in various stages of
development, in the first quarter of 2008. Our team of professionals fully
pledges the effectiveness of our distinct products.

At this time, we have certain distribution channels with suppliers and customers
whom we know and trust, such as CVS, Target, Amazon, and hundreds of independent
pharmacies. Of the estimated 100,000 retailers (drug stores and food mass), we
expect to have 25,000 stores carry our products in 2008. Our mission is to
expand the sales of our products to more than 40,000 stores in 2009.

The accompanying financial information includes the operations of Allied Med,
Inc. and the operations of Amexdrug Corporation for all periods presented.

Results of operations

For the year ended December 31, 2007, Amexdrug reported sales of $6,139,635,
comprised entirely of income from the Company's pharmaceutical wholesale
business of selling brand name and generic pharmaceutical products, and
over-the-counter (OTC) health and beauty products. This was $1,489,800 more than
the $4,649,835 of sales reported for the year ended December 31, 2006. The
increase in sales is primarily due to sales made to additional customers and
successful marketing. Cost of goods sold for the year ended December 31, 2007
was $5,757,708, an increase of $1,551,186 from the $4,206,522 cost of goods sold
for the year ended December 31, 2006. During the year ended December 31, 2007
gross profit decreased by $61,386 to $381,927 or 6.2% of sales from the $443,313
or 9.5% of sales recorded for the year ended December 31, 2006. The Company
attributes its decrease in gross profit margin in 2007 due to increased sales of
lower profit margin products in 2007.

Selling, general and administrative expense was $477,527 for the year ended
December 31, 2007, an increase of $59,723 from the $417,804 recorded for the
year ended December 31, 2006. This increase in selling, general and


                                      -18-
<PAGE>

administrative expense is attributable to increased employee expense and lease
obligations assumed by the Company due to its acquisition of Dermagen, Inc.

During the year ended December 31, 2007, Amexdrug experienced net income of
$11,436. This was $9,731 less than the $21,167 net income recorded for the year
ended December 31, 2006.

Liquidity and capital resources - December 31, 2007

As of December 31, 2007, Amexdrug reported total current assets of $637,936,
comprised primarily of cash of $217,549, accounts receivable of $210,557 and
inventory of $194,542. Total assets as of December 31, 2007 were $694,997, which
included total current assets of $637,936, plus net property and equipment of
$21,061, lease deposits of $12,158, customer base of $4,561, goodwill of $17,765
and trademarks of $1,516.

Amexdrug's liabilities as of December 31, 2007 consist of accounts payable of
$518,540, notes payable to a related party of $62,342, accrued liabilities of
$16,971, and business line of credit balance of $54,936.

During the year ended December 31, 2007, Amexdrug generated $120,910 cash in
operating activities compared to $99,688 cash used in operating activities in
the year ended December 31, 2006. The primary adjustments to reconcile net
income to net cash provided by operating activities during 2007 were as follows:
an increase in accounts receivable of $6,346, an increase in accounts payable
and accrued liabilities of $186,286, an increase in inventory of $52,693,
depreciation expense of $26,601, accrued income taxes payable of $7,387 and a
deferred tax liability of $13,954. Cash increased during the year ended December
31, 2007 by $128,532 compared to a decrease during 2006 of $88,391. Amexdrug had
a cash balance of $217,549 at December 31, 2007. Operations have primarily been
funded through cash generated from operations. Increases in loans from related
parties have also provided some additional cash for operations from time to
time. Management does not anticipate that Amexdrug will need to seek additional
financing during the next twelve months.

Forward-looking statements

This document includes various forward-looking statements with respect to future
operations of Amexdrug that are subject to risks and uncertainties.
Forward-looking statements include the information concerning expectations of
future results of operations and such statements preceded by, followed by or
that otherwise include the words "believes," "expects," "anticipates,"
"intends," "estimates" or similar expressions. For those statements, Amexdrug
claims the protection of the safe harbor for forward-looking statements
contained in the Private Litigation Reform Act of 1995.

-------------------------------------------------------------------------------

                          ITEM 7. FINANCIAL STATEMENTS

-------------------------------------------------------------------------------

Amexdrug's consolidated audited balance sheet as of December 31, 2007 and
Amexdrug's consolidated audited statements of operations, stockholders' equity,
and cash flows for the fiscal years ended December 31, 2007 and 2006 are
included hereafter.



                                      -19-
<PAGE>

                      AMEXDRUG CORPORATION AND SUBSIDIARIES


                          INDEX TO FINANCIAL STATEMENTS


                                                                           Page
                                                                           ----

 Reports of Independent Registered Public Accounting Firms..................21

 Consolidated Balance Sheet -- December 31, 2007............................23

 Consolidated Statements of Operations for the Years Ended
   December 31, 2007 and 2006...............................................24

 Consolidated Statements of Stockholders' Equity for the
    Years Ended December 31, 2007 and 2006..................................25

 Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2007 and 2006..............................................26

 Notes to Consolidated Financial Statements.................................27




                                      -20-
<PAGE>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------



Board of Directors
Amexdrug Corporation.
Beverly Hills, California

We have  audited the balance  sheet of Amexdrug  Corporation  as of December 31,
2007,  and the related  statements of operations,  stockholders  equity and cash
flows  for the year  ended  December  31,  2007.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Amexdrug Corporation
as of December 31, 2007,  and the results of its  operations  and its cash flows
for the year ended December 31, 2007, in conformity with U.S. generally accepted
accounting principles.

We were not engaged to examine management's assertion about the effectiveness of
Amexdrug  Corporation's internal control over financial reporting as of December
31, 2007 and, accordingly, we do not express an opinion thereon.




HJ Associates & Consultants, LLP
Salt Lake City, Utah
March 31, 2008



                                      -21-
<PAGE>
                        HANSEN, BARNETT & MAXWELL, P.C.
                           A Professional Corporation
                          CERTIFIED PUBLIC ACCOUNTANTS
                            5 Triad Center, Suite 750
                          Salt Lake City, UT 84180-1128
                              Phone: (801) 532-2200
                               Fax: (801) 532-7944
                                 www.hbmcpas.com


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and the Stockholders
Amexdrug Corporation
Beverly Hills, California

We have audited the accompanying consolidated statements of operations,
stockholders' equity, and cash flows of Amexdrug Corporation and subsidiaries as
of December 31, 2006 and 2005, and the related consolidated for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audit provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Amexdrug Corporation and subsidiaries as of December 31, 2006, in conformity
with U.S. generally accepted accounting principles.


HANSEN, BARNETT & MAXWELL, P.C.

Salt Lake City, Utah
April 9, 2007

                                      -22-
<PAGE>
                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

 December 31,                                                         2007
--------------------------------------------------------------------------------
ASSETS
Current Assets
Cash                                                             $      217,549
Accounts receivable                                                     210,557
Inventory                                                               194,542
Deferred tax asset                                                        7,000
Account Settlement Receivable                                             8,288
--------------------------------------------------------------------------------
   Total Current Assets                                                 637,936
--------------------------------------------------------------------------------
Property and Equipment
Office and computer equipment                                           181,026
Leasehold improvements                                                   15,700
--------------------------------------------------------------------------------
   Total Property and Equipment                                         196,726

Less:  Accumulated depreciation                                        (175,665)
--------------------------------------------------------------------------------
   Net Property and Equipment                                            21,061

Lease Deposits                                                           12,158
Customer Base, Net of Accumulated Amortization
   of $13,698                                                             4,561
Trademark, Net of Accumulated Amortization of $134                        1,516
Goodwill                                                                 17,765
--------------------------------------------------------------------------------
Total Assets                                                     $      694,997
--------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable                                                 $      518,540
Payables - related parties                                               62,342
Accrued liabilities                                                      16,971
Business Line of Credit                                                  54,936
--------------------------------------------------------------------------------

   Total Current Liabilities                                            652,789
--------------------------------------------------------------------------------
Stockholders' Equity
Common Stock - $0.001 par value; 50,000,000
   shares authorized; 8,470,481 shares issued
   and outstanding                                                        8,471
Additional paid-in capital                                               83,345
Accumulated deficit                                                     (49,608)
--------------------------------------------------------------------------------

   Total Stockholders' Equity                                            42,208
--------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                       $      694,997
--------------------------------------------------------------------------------

   The accompanying notes are an integral part of these financial statements.


                                      -23-
<PAGE>

                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                             For the Years
                                                             Ended Dec 31,
                                                      --------------------------
                                                         2007           2006
--------------------------------------------------------------------------------

Sales                                                 $ 6,139,635   $ 4,649,835
Cost of Goods Sold                                      5,757,708     4,206,522
--------------------------------------------------------------------------------

Gross Profit                                              381,927       443,313
Operating Expenses
Selling, general and administrative expense              (477,527)     (417,804)
Interest expense                                           (4,530)       (5,725)
Interest and other income                                 116,302             -
--------------------------------------------------------------------------------

Income From Operations                                     16,172        19,784
--------------------------------------------------------------------------------

Income Before Income Taxes                                 16,172        19,784

Provision for Income Taxes                                 (4,736)        1,383
--------------------------------------------------------------------------------

Net Income                                            $    11,436   $    21,167
--------------------------------------------------------------------------------

Basic & Diluted Income Per Common Share               $      0.00          0.00
--------------------------------------------------------------------------------

Basic Weighted-Average Common
   Shares Outstanding                                   8,470,481     8,470,481
--------------------------------------------------------------------------------






   The accompanying notes are an integral part of these financial statements.


                                      -24-
<PAGE>

                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                        STATEMENTS OF STOCKHOLDERS EQUITY


                                                                        Total
                            Common Stock       Additional   Accumu-     Stock-
                        ---------------------    Paid-In    lated      holders'
                          Shares       Amount    Capital    Deficit     Equity
                        --------------------------------------------------------
Balance, December 31,
2005                    8,470,481     $ 8,471    $ 83,345  $ (82,211) $   9,605

Net income                      -           -           -     21,167     21,167
--------------------------------------------------------------------------------
Balance, December 31,
2006                    8,470,481       8,471      83,345    (61,044)    30,772

Net income                      -           -           -     11,436     11,436
--------------------------------------------------------------------------------
Balance, December 31,
2007                    8,470,481     $ 8,471    $ 83,345  $ (49,608) $  42,208
--------------------------------------------------------------------------------







   The accompanying notes are an integral part of these financial statements.


                                      -25-
<PAGE>

                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                             For the Years
                                                             Ended Dec 31,
                                                      --------------------------
                                                          2007          2006
--------------------------------------------------------------------------------

Cash Flows from Operating Activities:
Net income                                            $    11,436   $    21,167
Adjustments to reconcile net income to net cash
 used in operating activities:
   Depreciation                                            26,601        20,649
   Amortization                                             6,186         6,124
   Deferred income taxes                                        -       (12,956)

   Changes in operating assets and liabilities:
     Accounts receivable                                   (6,346)      (88,821)
     Allowance for doubtful accounts                      (29,788)       10,288
     Prepaid expenses                                       3,993          (213)
     Account settlement receivable                         (8,288)            -
     Inventory                                            (52,693)      (63,918)
     Accounts payable and accrued liabilities             186,286        (2,318)
     Deferred Tax Asset                                     4,864             -
     Accrued income taxes                                  (7,387)       10,310
     Deferred Tax Liability                               (13,954)            -
--------------------------------------------------------------------------------

     Net Cash Provided by (Used in)
     Operating Activities                                 120,910       (99,688)
--------------------------------------------------------------------------------

Cash Flows from Investing Activities:
Purchase of property & equipment                          (16,044)            -
Acquisition of trademark                                     (650)       (1,000)
--------------------------------------------------------------------------------

     Net Cash Used in Investing Activities                (16,694)       (1,000)
--------------------------------------------------------------------------------

Cash Flows from Financing Activities:
Note Payable-Nora Amin                                    (10,798)       20,000
Proceeds from borrowings from business line of credit      54,936             -
Principal payments on capital lease obligations           (19,822)       (7,703)
--------------------------------------------------------------------------------

     Net Cash Provided by Financing
     Activities                                            24,316        12,297
--------------------------------------------------------------------------------
Net Increase (Decrease) in Cash                           128,532       (88,391)

Cash at Beginning of Period                                89,017       177,408
--------------------------------------------------------------------------------

Cash at End of Period                                 $   217,549   $    89,017
--------------------------------------------------------------------------------

Supplemental Cash Flow Information:
Cash paid for interest                                $     3,546   $     2,958
--------------------------------------------------------------------------------
Conversion of notes payable to common stock                     -             -
--------------------------------------------------------------------------------

   The accompanying notes are an integral part of these financial statements.


                                      -26-
<PAGE>
                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

Organization and Nature of Operations - Amexdrug's wholly owned subsidiaries
include Allied Med, Inc., Dermagen, Inc. and BioRx Pharmaceuticals.

Allied Med, Inc., was formed in October 1997 and is engaged in the
pharmaceutical wholesale business of selling brand and generic pharmaceuticals
products, over-the-counter drug and non-drug products and health and beauty
products to independent and chain pharmacies, alternative care facilities and
other wholesalers.

Dermagen, Inc. is a manufacturing company specializing in the manufacturing and
distribution of certain pharmaceuticals, medical devices, and health and beauty
products. Dermagen has a US Federal Drug Administration (FDA) registered and
state FDA approved manufacturing facility license to develop skin and novel
health and beauty products for niche markets.

On November 8, 2004, Amexdrug formed a new subsidiary, BioRx Pharmaceuticals,
Inc. as a Nevada corporation. BioRx Pharmaceuticals, Inc. was formed for the
purpose of repacking and selling generic and branded pharmaceuticals. Currently,
BioRx Pharmaceuticals, Inc. has assets, liabilities, and operations.

Principles of Consolidation - The accompanying consolidated financial statements
include the accounts of Amexdrug Corporation and its wholly-owned subsidiaries,
Allied Med, Inc., Dermagen, Inc. and BioRx Pharmaceuticals. Inter-company
accounts and transactions have been eliminated in consolidation.

Business Condition - During the year ended December 31, 2007, the Company
experienced an increase in revenue of approximately 32.5% over revenues earned
during 2006. At December 31, 2007, the Company did have a working capital
deficiency of $14,853.

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from these estimates.

Concentration of Credit Risk - The Company's historical revenues and receivables
have been derived solely from the pharmaceutical industry. Although the Company
primarily sells products on a cash-on-delivery basis, the Company also sells
products to certain customers under credit terms. The Company performs ongoing
credit evaluations of its customers' financial conditions and usually requires a
delayed check depository from its customers at the date products are shipped.
The Company maintains an allowance for accounts receivable that may become
uncollectible.

During the year ended December 31, 2007, purchases from two vendors accounted
for 65% and 19% of total purchases, respectively. Accounts payable to these
vendors accounted for 8% and 68% of the total accounts payable balance as of
December 31, 2007, respectively. During the year ended December 31, 2006,
purchases from those two vendors accounted 47% and 27% of total purchases,
respectively. Accounts payable to these vendors accounted for 12% and 54% of the
total accounts payable balance as of December 31, 2006. The loss of these
vendors could have a potential negative effect upon the Company's future
operations.


                                      -27-
<PAGE>
                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


Cash and Cash Equivalents - For purposes of the consolidated statements of cash
flows, the Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

Fair Value of Financial Instruments - The carrying amounts of capital lease
obligations approximate their fair values based on current interest rates
available to the Company.

Accounts Receivable - An allowance for uncollectible accounts receivable is
established by charges to operations for amounts required to maintain an
adequate allowance, in management's judgment, to cover anticipated losses from
customer accounts and sales returns. Such accounts are charged to the allowance
when collection appears doubtful. Any subsequent recoveries are credited to the
allowance account.

Inventory - Inventory includes purchased products for resale and raw materials
and supplies necessary to manufacture pharmaceuticals, medical devices, and
health and beauty products and is stated at the lower of cost (using the
first-in, first-out method) or market value. Provisions, when required, are made
to reduce excess and expired inventory to its estimated net realizable value.
Although competitive pressures and pharmaceutical advancements expose the
Company to the risk that estimates of the net realizable could change in the
near term, the Company's agreements with most vendors provide for the right of
return of outdated or expired inventory. The Company is exposed to other
ownership related risks associated with inventory. Inventory consists of the
following:

                                                         2007
                                                      -----------
                Raw materials                         $    62,719
                Finished goods                            131,823
                                                      -----------
                Total inventory                       $   194,542
                                                      ===========

Property and Equipment - Property and equipment are stated at cost less
accumulated depreciation. Major additions and improvements are capitalized,
while minor repairs and maintenance costs are expensed when incurred.
Depreciation is computed using the straight-line method over the estimated
useful lives of the related assets, which are as follows:

                Office and computer equipment         3-10 years
                Leasehold improvements                2-5 years

Depreciation expense was $26,601 and $20,649 for the years ended December
31,2007 and 2006, respectively. On January 1, 2006, the Company adopted
Statement of Financial Accounting Standards (SFAS) Statement No. 153, Exchanges
of Non-monetary Assets--an amendment of APB Opinion No. 29. Beginning on January
1, 2006, the Company recognizes gains or losses upon the trade-in of property
and equipment based upon the difference between the fair value and the
depreciated cost of the assets on the dates exchanged for those transactions
with commercial substance. Commercial substance is defined as a transaction in
which the future cash flows of the Company are expected to change significantly
as a result of the exchange. Through December 31, 2005 and before the adoption





                                      -28-
<PAGE>
                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


of SFAS Statement No. 153, no gain or loss was recognized upon the trade-in of
property or equipment. As there were no trade-ins of property or equipment
during the year ended December 31, 2006, there were no effects on the financial
statements as a result of adoption of SFAS Statement No. 153.

Intangible Assets - The estimated fair value of Dermagen's customer base was
recorded as an intangible asset at the date of acquisition and is amortized over
the estimated useful life of the customer base, which is three years. Trademarks
are recorded at cost and are amortized over their estimated useful life, which
is ten years. An impairment charge is recognized if the carrying amount is not
recoverable and the carrying amount exceeds the fair value of the intangible
assets as determined by projected discounted cash flows.

Goodwill - Goodwill represents the excess of the purchase price of Dermagen,
Inc. over the fair value of its net assets at the date of acquisition. Goodwill
is not amortized, but is tested for impairment quarterly or when a triggering
event occurs. The testing for impairment requires the determination of the fair
value of the asset or entity to which the goodwill relates (the reporting unit).
The fair value of a reporting unit is determined based upon a weighting of the
quoted market price of the Company's common stock and present value techniques
based upon estimated future cash flows of the reporting unit, considering future
revenues, operating costs, the risk-adjusted discount rate and other factors.
Impairment is indicated if the fair value of the reporting unit is allocated to
the assets and liabilities of that unit, with the excess of the fair value of
the reporting unit over the amounts assigned to its assets and liabilities
assigned to the fair value of goodwill. The amount of impairment of goodwill is
measured by the excess of the goodwill's carrying value over its fair value. As
of December 31, 2007, the Company's goodwill was not deemed to be impaired.

Impairment of Long-Lived Assets - The Company reviews its long-lived assets for
impairment when events or changes in circumstances indicate that their carrying
value may not be recoverable. The Company evaluates, at each balance sheet date,
whether events and circumstances have occurred which indicate possible
impairment. The Company uses an estimate of future undiscounted net cash flows
from the related asset or group of assets over their remaining life in measuring
whether the assets are recoverable. As of December 31, 2007, based on the
analysis of estimated undiscounted future net cash flows, the Company did not
consider any of its long-lived assets to be impaired.

Revenue  Recognition - The Company  generates  revenues from the manufacture and
resale of pharmaceuticals, over-the-counter products, health and beauty care
products and nutritional supplements. The Company accounts for these revenues at
the time of shipment to the customer. An allowance for sales returns is provided
for products sold on a cash-on-delivery  basis that are not accepted or paid for
by the customer.

Income Taxes - The Company recognizes an asset or liability for the deferred tax
consequences of operating loss carry forwards and temporary differences between
the tax bases of assets or liabilities and their reported amounts in the
financial statements that will result in taxable or deductible amounts in future
years when the reported amounts of the assets or liabilities are recovered or
settled. These deferred tax assets or liabilities are measured using the enacted
tax rates that are expected to be in effect when the differences are expected to
reverse. Deferred tax assets are reviewed periodically for recoverability and
valuation allowances are provided, as necessary.


                                      -29-
<PAGE>

                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


Basic Income Per Share - Basic income per share is computed by dividing net
income by the weighted-average number of common shares outstanding. As of
December 31, 2007 and 2006, the Company did not have any potentially issuable
common shares outstanding; accordingly, diluted income per share is not
applicable to the Company and is not presented.

Recent Accounting Pronouncements - In September 2006, the FASB issued SFAS No.
157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
This statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. In February 2008, the FASB issued FASB position (FSP FIN) No. 157-2 which
extended the effective date for certain non-financial assets and non- financial
liabilities to fiscal years beginning after November 15, 2008. The Company does
not expect the adoption of SFAS No. 157 to have a material impact on our
consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities - including an amendment of FASB
Statement No. 115 (SFAS 159). SFAS 159 allows measurement at fair value of
eligible financial assets and liabilities that are not otherwise measured at
fair value. If the fair value option for an eligible item is elected, unrealized
gains and losses for that item shall be reported in current earnings at each
subsequent reporting date. SFAS 159 also establishes presentation and disclosure
requirements designed to draw comparison between the different measurement
attributes the Company elects for similar types of assets and liabilities. This
statement is effective for fiscal years beginning after November 15, 2007. The
Company is in the process of evaluating the application of the fair value option
and its effect on its financial position and results of operations.

In June 2006, the FASB issued Financial Interpretation No. (FIN) 48, "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement 109." FIN
48 prescribes a recognition threshold and a measurement attribute for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. This interpretation also provides guidance
on de-recognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. This interpretation is effective for fiscal
years beginning after December 15, 2006. We have noted that the Company has one
item that would be subject to FIN 48, in that the Company has yet to file past
tax returns. The Company is working with the accounting firm to have all returns
filed no later than the end of the second quarter. The adoption of FIN 48 did
not have a material impact on our results of operations.





                                      -30-
<PAGE>

                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


NOTE 2 - INTANGIBLE ASSETS

Intangible Assets - Intangible assets consist of trademarks and the customer
base of Dermagen, Inc. Upon acquisition of Dermagen, Inc., the Company recorded
the customer base at $18,259. Accumulated amortization on the customer base was
$13,698 and $7,610 at December 31, 2007 and 2006, respectively. During the year
ended December 31, 2006, the Company acquired trademarks valued at a cost of
$1,000. Accumulated amortization on the trademarks was $134 at December 31,
2007. In aggregate, the Company recognized amortization expense of $6,186 and
$6,124 for the years ended December 31, 2007 and 2006, respectively.

The following table describes the annual future amortization of the trademarks
and customer base.

Years Ending December 31,
-------------------------
2008                                                  $     4,728
2009                                                          165
2010                                                          165
2011                                                          165
2012                                                          165
Thereafter                                                    689
-----------------------------------------------------------------
Total future amortization expense                     $     6,077
-----------------------------------------------------------------

Goodwill - The goodwill of $17,765 is from the acquisition of Dermagen.

NOTE 3 - Leases

Operating Leases --The Company leases certain of its operating facilities under
non-cancelable operating leases that expire during 2008. Rent expense is
recognized on a straight-line basis over the term of the leases. In addition,
the Company pays payments on and uses an automobile that is under a
non-cancelable operating lease in the name of the wife of the president of the
Company. The automobile lease was initiated in January of 2007 and requires 36
monthly payments of $530. Rent expense relating to all operating leases for the
years ended December 31, 2007 and 2006 was $61,459 and $62,045, respectively.
Required future minimum payments under the non-cancelable operating leases are
as follows:

Years Ending December 31,
2008                                                  $     6,359
2009                                                          530
-----------------------------------------------------------------
Total future minimum payments                         $     6,889
-----------------------------------------------------------------

As of December 31, 2007, the Company had refundable deposits relating to these
operating leases of $11,058. Additionally, the Company leases its executive
offices on a month-to-month basis for $1,060 per month.



                                      -31-
<PAGE>
                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


Capital Lease Obligations -- Certain equipment is leased under capital lease
agreements. The following is a summary of assets held under capital lease
agreements at December 31, 2007:

         Property and Equipment                                     $    97,706
         Less:  accumulated depreciation                                (97,706)
         -----------------------------------------------------------------------
         Net Property and Equipment under capital lease             $         -
         -----------------------------------------------------------------------

During the year ended December 31, 2007 and 2006, the Company recognized $13,337
and $8,498, respectively, of depreciation relating to these leased assets.

NOTE 4 - Income taxes

The provision for income taxes for the years ended December 31, 2007and 2006
consisted of the following:

                                                          2007          2006
                 ---------------------------------------------------------------
                 Current tax expense                  $     4,185   $    11,573
                 Deferred tax benefit                     (22,046)      (12,956)
                 ---------------------------------------------------------------
                 Benefit from Income Taxes            $   (17,861)  $    (1,383)
                 ---------------------------------------------------------------

The following is a reconciliation of the income tax at the federal statutory tax
rate with the provision for income taxes for the years ended December 31, 2007
and 2006:

                                                          2007          2006
                 ---------------------------------------------------------------
                 Income tax at statutory rate (34%)   $     4,597   $     6,727
                 Non-taxable items                           (782)          680
                 Change in valuation allowance                  -             -
                 Effect of actual lower tax rate           (1,273)       (9,944)
                 State (tax) benefit net of federal
                 tax                                        1,643         1,154
                 ---------------------------------------------------------------
                 Benefit from Income Taxes            $     4,185   $    (1,383)
                 ---------------------------------------------------------------

The components of the net deferred tax asset (liability) as of December 31,
2007and 2006 are as follows:

                                                          2007          2006
                 ---------------------------------------------------------------
                 Operating loss carry forwards        $         -   $         -
                 Allowance for bad debts                        -        11,864
                 ---------------------------------------------------------------
                 Tax Deferred Tax Assets                        -        11,864
                 ---------------------------------------------------------------
                 Accrued Expenses                             300        (4,242)
                 Depreciation                               6,700        (9,712)
                  --------------------------------------------------------------
                 Total Deferred Tax Asset                   7,000       (13,954)
                 ---------------------------------------------------------------
                 Net Deferred Tax Asset               $     7,000   $    (2,090)
                 ---------------------------------------------------------------



                                      -32-
<PAGE>
                      AMEXDRUG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


No valuation allowance has been recorded as of December 31, 2007.

NOTE 5 - RELATED PARTY TRANSACTIONS

During the year ended December 31, 2004, the Company purchased inventory
totaling $34,304 from Amrx Corporation, a corporation owned by the president of
the Company. No inventory was purchased from this company during the years ended
December 31, 2007 and 2006. Accounts payable to Amrx totaled $13,140 as of
December 31, 2007 and 2006.

The Company borrowed $40,000 from a shareholder in October of 2005 to facilitate
the purchase of Dermagen and another $20,000 in August of 2006. The balance of
$49,202 is payable on demand and carries an annual interest rate of 8%, payable
every 6 months.

NOTE 6 -- BANK LINE OF CREDIT

Also we have received a line of credit from Wells Fargo Bank for $70,000, which
as of December 31, 2007 has a balance owing for $54,936 at a rate of prime plus
4% payable every month.

NOTE 7 --SEGMENT INFORMATION

Beginning in 2005, the Company has operations in two segments of its business,
namely: Distribution and Health and Beauty Products. Distribution consists of
the wholesale pharmaceutical distribution and resale of brand and generic
pharmaceutical products, over-the-counter drugs and non-drug products and health
and beauty products. Health and Beauty Products consist of the manufacture and
distribution of primarily health and beauty products.

The following tables describe information regarding the operations and assets of
these reportable business segments:

--------------------------------------------------------------------------------
                                         Health and   Elimination of
                                           Beauty      Intersegment
                         Distributions    Products       Assets         Total
--------------------------------------------------------------------------------
For the year ended
  December 31, 2007
Sales to external
  customers                $ 5,907,116   $  225,004            -    $  6,132,120
Depreciation and
  amortization                  13,738       19,049            -          32,787
Segment income (loss)
  before taxes                 136,299     (120,127)           -          16,172
Segment assets                 455,076      239,921            -         694,997
--------------------------------------------------------------------------------

For the year ended
  December 31, 2006
Sales to external
  customers                $ 4,427,231   $  222,604            -    $  4,649,835
Depreciation and
  amortization                  10,237       16,536            -          26,773
Segment income (loss)
  before taxes                  29,651       (9,867)           -          19,784
Segment assets                 401,418      147,403      (54,521)        494,300
--------------------------------------------------------------------------------



                                      -33-
<PAGE>

--------------------------------------------------------------------------------

            ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                       ACCOUNTING AND FINANCIAL DISCLOSURE

--------------------------------------------------------------------------------

As previously reported in a Form 8-K/A Current Report filed by the Company on
May 25, 2007, Hansen, Barnett & Maxwell, P.C. was terminated on April 30, 2007
as the certifying accountant for the Company (the "Registrant").

Hansen, Barnett & Maxwell, P.C.'s report on the Registrant's financial
statements for either of the past two years did not contain an adverse opinion
or disclaimer of opinion, nor was it modified as to uncertainty, audit scope, or
accounting principles.

Hansen, Barnett & Maxwell, P.C. has served as the certifying accountant for the
Company's financial statements for more than the past three years. From the date
on which Hansen, Barnett & Maxwell, P.C. was engaged until the date Hansen,
Barnett & Maxwell, P.C. was terminated, there were no disagreements with Hansen,
Barnett & Maxwell, P.C. on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Hansen, Barnett & Maxwell,
P.C. would have caused Hansen, Barnett & Maxwell, P.C. to make reference to the
subject matter of the disagreements in connection with any reports it would have
issued, and there were no "reportable events" as that term is defined in Item
304(a)(1)(iv) of Regulation S-B, except for the following:

              1. In connection with the audit of the December 31, 2005 financial
         statements, as disclosed under Item 8A in the Company's Form 10-KSB for
         the year ended December 31, 2005, Hansen, Barnett & Maxwell, P.C.
         informed the Company of the following material weakness affecting the
         Company's ability to develop reliable financial statements:

              The Company has a material weakness in the adequacy of its closing
              process and its preparation of adjusting entries to effectively
              prepare accurate financial statements with the necessary level of
              review and supervision.

              2. In connection with the audit of the December 31, 2006 financial
         statements, as disclosed under Item 8A in the Company's Form 10-KSB for
         the year ended December 31, 2006, Hansen, Barnett & Maxwell, P.C.
         informed the Company of the following material weakness affecting the
         Company's ability to develop reliable financial statements:

              The Company has a material weakness in the adequacy of its ability
              to complete notes to the financial statements.

On April 30, 2007, the Company entered into an engagement letter with HJ
Associates & Consultants, LLP to assume the role of its new certifying
accountant. HJ Associates & Consultants, LLP has been asked to audit the year
ended December 31, 2007. During the two most recent fiscal years and the
subsequent interim periods prior to the engagement of HJ Associates &
Consultants, LLP, the Company did not consult with HJ Associates & Consultants,
LLP with regard to:



                                      -34-
<PAGE>

(i) the application of accounting principles to a specified transaction, either
completed or proposed; or the type of audit opinion that might be rendered on
the Company's financial statements; or

(ii) any matter that was either the subject of a disagreement or a reportable
event (as described in Item 304(a)(1)(iv) of Regulation S-B).

The termination of the former auditor and the engagement of the new principal
auditor was recommended and approved by the Company's Board of Directors.

-------------------------------------------------------------------------------

                        ITEM 8A. CONTROLS AND PROCEDURES

-------------------------------------------------------------------------------

We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed,
summarized, and reported within the required time periods and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Principal Financial Officer, as appropriate, to
allow for timely decisions regarding required disclosure. The effectiveness of
any system of disclosure controls and procedures is subject to certain
limitations, including the exercise of judgment in designing, implementing, and
evaluating the controls and procedures, the assumptions used in identifying the
likelihood of future events, and the inability to eliminate improper conduct
completely. A controls system, no matter how well designed and operated, cannot
provide absolute assurance that the objectives of the controls system are met,
and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected. As a
result, there can be no assurance that our disclosure controls and procedures
will detect all errors or fraud.

As required by Rule 13a-15 under the Exchange Act, we have completed an
evaluation, under the supervision and with the participation of our management,
including the Chief Executive Officer and Principal Financial Officer, of the
effectiveness and the design and operation of our disclosure controls and
procedures as of December 31, 2007. Based upon this evaluation and as a result
of the material weakness discussed below, our management, including the Chief
Executive Officer and Principal Financial Officer, has concluded that our
disclosure controls and procedures were not effective as of December 31, 2007.
Management nevertheless has concluded that the consolidated financial statements
included in this Form 10-KSB present fairly, in all material respects, the
results of our operations and our financial position for the periods presented
in conformity with generally accepted accounting principles.

A material weakness is a control deficiency, or combination of control
deficiencies, that result in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected in a timely basis by management or employees in the normal course of
performing their assigned functions. As of December 31, 2007, we identified the
following material weakness in our internal controls:

         o    We have a material weakness in the adequacy of our ability to
              complete notes to the financial statements.

There were no changes to any reported financial results that have been released
by us in this or any other filings as a result of the above-described material
weakness; however, the following actions have been commenced in response to the
inadequacies noted above and in the prior year Form 10-KSB:


         o    Initiation of an evaluation and remediation process with respect
              to internal controls over financial reporting and related
              processes designed to identify internal controls that mitigate
              financial reporting risk and identify control gaps that may
              require further remediation.



                                      -35-
<PAGE>

         o    Evaluation of the staffing, organizational structure, systems,
              policies and procedures, and other reporting processes, to improve
              the accuracy of closing and adjusting these accounts and the
              preparation of accurate notes to the financial statements and to
              enhance the level of review and supervision.

Other than as described  above,  since the  evaluation  date,  there has been no
change in our internal  controls over  financial  reporting (as defined in Rules
13a-15 and 15d-15 under the Exchange Act) that has  materially  affected,  or is
reasonably  likely to materially  affect,  our internal  controls over financial
reporting.

-------------------------------------------------------------------------------

                           ITEM 8B. OTHER INFORMATION

-------------------------------------------------------------------------------

None.


                                    PART III

-------------------------------------------------------------------------------

        ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
           PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

-------------------------------------------------------------------------------

Identification of directors and executive officers

The following table as of March 26, 2008, includes the name, age, and position
of each executive officer and director of Amexdrug and the term of office of
each director.

Name               Age    Position                 Director and/or Officer Since
----               ---    --------                 -----------------------------

Jack Amin          49     President, Secretary,            April 2000
                          Treasurer and Director

Rodney S. Barron,  55     Director                         December 2001
M.D.

Behrooz Meimand    59     Director                         December 2001

Each director of the Company serves for a term of one year and until his
successor is elected at the Company's annual shareholders' meeting and is
qualified, subject to removal by the Company's shareholders. Each officer
serves, at the pleasure of the board of directors, for a term of one year and
until his successor is elected at the annual meeting of the board of directors
and is qualified.

Included below is certain biographical information regarding each of the
Company's executive officers and directors.

Jack Amin has served as the President, Secretary, Treasurer and as a director of
Amexdrug since April 2000. He holds a Bachelor of Science in Electronic
Engineering from Western State College of Engineering of LA, California in 1982.
Since 1980 Mr. Amin has been engaged in various capacities, including sales and
management, within the pharmaceutical industry. Mr. Amin has served as the
President, Chief Executive Officer and director of Amexdrug's wholly-owned
subsidiary, Allied Med, Inc., a company which he founded in 1997.


                                      -36-
<PAGE>

Rodney S. Barron, M.D., has served as a director of Amexdrug since December
2001. Dr. Barron obtained his medical degree from New York Medical College in
1978. He then performed a residency in general surgery from 1978 to 1980, and a
residency in urology from 1980 to 1983. Dr. Barron has been involved in the
private practice of medicine in Los Angeles, California from 1983 through the
present time.

Behrooz Meimand has served as a director of Amexdrug since December 2001. Mr.
Meimand obtained a master's degree in insurance from the National University of
Iran in 1970. He has had 30 years of experience in the insurance industry. Mr.
Meimand has been the president of Behrooz Meimand Insurance Services, Inc. for a
period of time exceeding the past 5 years. Currently Mr. Meimand is also a
director of Magbid Foundation and Nessah Education & Culture Center.

Significant employees

Amexdrug and its subsidiaries have no present employees who are expected to make
a significant contribution to Amexdrug's business other than Amexdrug's current
officers and directors. It is expected that current members of management will
be the only persons whose activities will be material to Amexdrug's operations.
Members of management are the only persons who may be deemed to be promoters of
Amexdrug.

Family relationships

There are no family relationships between any directors or executive officers of
Amexdrug and/or the officers, directors or managers of its subsidiary companies,
Allied Med, Inc., Dermagen, Inc., Royal Health Care, Inc. and BioRx
Pharmaceuticals, Inc., either by blood or by marriage.

Involvement in certain legal proceedings

During the past five years, no present or former director, person nominated to
become a director, executive officer, promoter or control person of Amexdrug:

              (1) was a general partner or executive officer of any business
         which filed a petition in bankruptcy or against which any bankruptcy
         petition was filed, either at the time of the bankruptcy or two years
         prior to that time;

              (2) was convicted in a criminal proceeding or named subject to a
         pending criminal proceeding (excluding traffic violations and other
         minor offenses);

              (3) was subject to any order, judgment or decree, not subsequently
         reversed, suspended or vacated, of any court of competent jurisdiction,
         permanently or temporarily enjoining, barring, suspending or otherwise
         limiting his involvement in any type of business, securities or banking
         activities; or

              (4) was found by a court of competent jurisdiction (in a civil
         action), the Securities and Exchange Commission or the Commodity
         Futures Trading Commission to have violated a federal or state
         securities or commodities law, and the judgment has not been reversed,
         suspended or vacated.



                                      -37-
<PAGE>

Section 16(a) beneficial ownership reporting compliance

Based solely upon a review of Forms 3 and 4 furnished to the Company under Rule
16a-3(d) during its most recent fiscal year, the Company knows of no person who
was a director, officer, beneficial owner of more than ten percent of any class
of equity securities of the Company registered pursuant to Section 12
("Reporting Person") that failed to file on a timely basis any reports required
to be furnished pursuant to Section 16(a) during the most recent fiscal year.

-------------------------------------------------------------------------------

                         ITEM 10. EXECUTIVE COMPENSATION

-------------------------------------------------------------------------------

Cash compensation

The following table sets forth the aggregate compensation paid by Amexdrug
and/or its  subsidiaries  to the Company's  Chief  Executive  Officer and to any
other officer,  director or employee who received $100,000 or more during any of
the last three fiscal years:

                           SUMMARY COMPENSATION TABLE

                                        Long Term Compensation
                    Annual Compensation Awards              Payouts
                    ------------------- ------              -------
(a)              (b)      (c)    (d)    (e)      (f)     (g)      (h)   (i)

                                                        Secur-
                                                        ities          All
Name and      Year or                  Other    Rest-   Under-   LTIP  Other
Principal     Period    Salary  Bonus  Annual   ricted  lying    Pay-  Compen-
Position      Ended       ($)    ($)   Compen-  Stock   Options  outs  sation
-------------------------------------------------------------------------------

Jack Amin    12/31/07   $51,600   0       0      0          0      0     0
President/   12/31/06   $51,600   0       0      0          0      0     0
Director     12/31/05   $36,000   0       0      0          0      0     0

Except as described above, no cash compensation, deferred compensation or
long-term incentive plan awards were issued or granted to Amexdrug's management
during the fiscal years ended December 31, 2007 and 2006. Further, no member of
Amexdrug's management has been granted any option or stock appreciation rights.
Accordingly, no tables relating to such items have been included within this
Item.

There are no present plans whereby Amexdrug will issue any of its securities to
management, promoters, their affiliates or associates in consideration of
services rendered or otherwise, except as described herein.

Compensation of directors

Amexdrug has no arrangement for compensating its directors for their services as
directors or for serving on any committees. However, directors may be
compensated for services which they render as officers and/or as employees of
Amexdrug.


                                      -38-
<PAGE>

Employment contracts and termination of employment and change-in-control
arrangements

There are no employment contracts, compensatory plans or arrangements, including
payments to be received from Amexdrug with respect to any executive officer of
Amexdrug which would in any way result in payments to any such person because of
his or her resignation, retirement or other termination of employment with
Amexdrug or its subsidiaries, any change in control of Amexdrug or a change in
the person's responsibilities following a change in control of Amexdrug.

Nor are there any agreements or understandings for any director or executive
officer to resign at the request of another person. None of Amexdrug's directors
or executive officers is acting on behalf of or will act at the direction of any
other person.

Amexdrug intends to enter into an employment agreement with Jack Amin in the
near future that will provide for a salary of $150,000 per year retroactive to
January 1, 2008, and possible bonuses as the board of directors may determine
are appropriate. In the event Amexdrug is unable to pay the full $150,000 per
year annual salary to Mr. Amin, he has indicated that he may accept a portion of
the salary in the form of Amexdrug common stock.

Compensation pursuant to plans; pension table

There were no stock awards, restricted stock awards, stock options, stock
appreciation rights, long-term incentive plan compensation or similar rights
granted to any of our officers or directors. None of our officers or directors
presently holds directly any stock options or stock purchase rights. We have no
retirement, pension, profit sharing, or other plan covering any of our officers
and directors.

We have adopted no formal stock option plans for our officers, directors and/or
employees. We reserve the right to adopt one or more stock options plans in the
future. Presently we have no plans to issue additional shares of our common or
preferred stock or options to acquire the same to our officers, directors or
their affiliates or associates.

Other compensation

None.

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     ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

-------------------------------------------------------------------------------

Security ownership of certain beneficial owners

The following table sets forth the share holdings of those persons who are known
to Amexdrug to be the beneficial owners of more than five percent of Amexdrug's
common stock as of March 26, 2008. Each of these persons has sole investment and
sole voting power over the shares indicated.


                                      -39-
<PAGE>

                                Number                  Percent
Name and Address      of Shares Beneficially Owned      of Class
----------------      ----------------------------      --------

Jack Amin                      7,755,000(1)               91.6%
8909 West Olympic Blvd.
Suite 208
Beverly Hills, CA 90211

         (1) Mr.Amin disclaims beneficial ownership of 421,083 shares of common
         stock acquired by his wife, Nora Amin, during 2005 that are not
         included in the foregoing amount.

Security ownership of management

The following table sets forth the share holdings of Amexdrug's directors and
executive officers as of March 26, 2008. Each of these persons has sole
investment and sole voting power over the shares indicated.

                                   Number              Percent
Name and Address       of Shares Beneficially Owned    of Class
----------------      ----------------------------      --------

Jack Amin                      7,755,000(1)              91.6%
Rodney Barron, M.D.                    0                  0.0%
Behrooz Meimand                        0                  0.0%

All directors and executive
officers as a group (3)         7,755,000                91.6%

         (1 )Mr. Amin disclaims beneficial ownership of 421,083 shares of common
         stock acquired by his wife, Nora Amin, during 2005 that are not
         included in the foregoing amount

All common shares held by the officers, directors and principal shareholders
listed above are "restricted or control securities" and are subject to
limitations on resale. The shares may be sold in compliance with the
requirements of Rule 144, after a minimum one year holding period has been met.

Rule 13d-3 generally provides that beneficial owners of securities include any
person who directly or indirectly has or shares, voting power and/or investment
power with respect to such securities; and any person who has the right to
acquire beneficial ownership of such security within 60 days.

Any securities not outstanding which are subject to options, warrants or
conversion privileges exercisable within 60 days are treated as outstanding for
the purpose of computing the percentage of outstanding securities owned by that
person. But such securities are not treated as outstanding for the purpose of
computing the percentage of the class owned by any other person.

Changes in control

There are no present arrangements or pledges of Amexdrug's securities, known to
management, which may result in a change in control of Amexdrug.



                                      -40-
<PAGE>

-------------------------------------------------------------------------------

             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

-------------------------------------------------------------------------------

Transactions with management and others

Except as indicated below, and for the periods indicated, there were no material
transactions, or series of similar transactions, during the last three fiscal
years ended December 31, 2007, or since December 31, 2007, or any currently
proposed transactions, or series of similar transactions, to which the Company
was or is to be party, in which the amount involved exceeds the lesser of
$120,000 or one percent of the average of the company's total assets at year-end
for the last three fiscal years, and in which any director or executive officer,
or any security holder who is known by the Company to own of record or
beneficially more than 5% of any class of the Company's common stock, or any
member of the immediate family of any of the foregoing persons, has an interest,
other than the following:

1. Amexdrug anticipates that it will enter into an employment agreement with
Jack Amin in the near future. It is expected that the employment agreement will
be retroactive to January 1, 2008, and that it will provide for an annual salary
of $150,000 and possible bonuses as the board of directors may determine are
appropriate. The employment agreement may give Mr. Amin the option to take a
portion of the salary in shares of the Company's common stock.

2. During the year ended December 31, 2004, the Company purchased inventory
totaling $34,304 from Amrx Corporation, a corporation owned by the president of
the Company. No inventory was purchased from this company during the years ended
December 31, 2007, 2006 and 2005. Accounts payable to Amrx totaled $13,140 as of
December 31, 2007, 2006 and 2005.

3. In October 2005, the Company borrowed $40,000 from a shareholder to
facilitate the purchase of Dermagen, Inc., and another $20,000 in August 2006.
The $60,000 balance is payable on demand and carries an annual interest rate of
8.0%, payable every six months.

Parents of the company

Amexdrug has no parents, except to the extent that Mr. Amin may be deemed to be
a parent by virtue of his large percentage stockholdings of the Company's common
stock. See the caption "Security ownership of certain beneficial owners and
management" in item 11 of this report for a description of Mr. Amin's stock
ownership.

Transactions with promoters

The Company was organized more than five years ago therefore transactions
between the Company and its promoters or founders are not deemed to be material.



                                      -41-
<PAGE>

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                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

-------------------------------------------------------------------------------

(a)  Exhibits

Exhibit
Number            Description
-------           -----------


2.1               Agreement and Plan of Merger (to change domicile from
                  California to Nevada)*

2.2               Agreement and Plan of Reorganization (to acquire Allied Med,
                  Inc.)**

3.1               Articles of Incorporation***

3.2               By-Laws***

21.1              List of Subsidiaries of Amexdrug Corporation***

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 Section
                  906 of the Sarbanes- Oxley Act of 2002

32.2              Certification of Chief Financial Officer pursuant to Section
                  906 of the Sarbanes- Oxley Act of 2002

                  Summaries of all exhibits contained within this report are
                  modified in their entirety by reference to these Exhibits.

              *   Exhibit 2.1 is incorporated by reference from Amexdrug's Form
                  8-K Current Report filed December 31, 2001 as Exhibit 10.01

              **  Exhibit 2.2 is incorporated by reference from Amexdrug's Form
                  8-K Current Report filed January 15, 2002 as Exhibit 10.01

              *** Exhibits 3.1, 3.2 and 21.1 are incorporated by reference from
                  Amexdrug's 2001 Form 10-KSB filed April 1, 2002.



                                      -42-
<PAGE>

(b)               Reports on Form 8-K

Amexdrug  filed no reports  on Form 8-K  during  the last  quarter of the period
covered by this report:

-------------------------------------------------------------------------------

                 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

-------------------------------------------------------------------------------

Audit Fees

For the fiscal years ended December 31, 2007 and 2006, our principal accountant
billed $25,900 and $19,000, respectively, for the audit of our annual
financial statements and review of financial statements included in our Form
10-QSB filings.

Audit-Related Fees

There were no other fees billed for services reasonably related to the
performance of the audit or review of our financial statements outside of those
fees disclosed above under "Audit Fees" for the fiscal years ended December 31,
2007 and 2006.

Tax Fees

For the fiscal years ended December 31, 2007 and 2006, our principal accountant
billed us $0 and $1,000, respectively, for services for tax compliance, tax
advice, and tax planning work.

All Other Fees

There were no other fees billed by our principal accountants other than those
disclosed above for fiscal years ended December 31, 2007 and 2006.

Pre-Approved Policies and Procedures

Prior to engaging our accountants to perform a particular service, our board of
directors obtains an estimate for the service to be performed. All of the
services described above were approved by the board of directors in accordance
with its procedures.




                                      -43-
<PAGE>

-------------------------------------------------------------------------------

                                   SIGNATURES

-------------------------------------------------------------------------------

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                AMEXDRUG CORPORATION



Date: March 31, 2008            By /s/ Jack Amin
                                  ----------------------------------
                                  Jack Amin, Director, President and
                                  Chief Executive Officer


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.



Date: March 31, 2008            By /s/ Jack Amin
                                  ----------------------------------
                                  Jack Amin, Director, President and
                                  Chief Executive Officer, Chief
                                  Financial Officer and Chief
                                  Accounting Officer



Date: March 31, 2008            By___________________________________
                                  Rodney Barron, M.D., Director



Date: March 31, 2008            By /s/ Behrooz Meimand
                                  -------------------------
                                  Behrooz Meimand, Director



                                      -44-
<PAGE>




                                  EXHIBIT INDEX

Exhibit                                                                Exhibit
Number            Description                                          Location
-------           -----------                                          --------

 2.1              Agreement and Plan of Merger                          *
                  (to change domicile from California

 2.2              Agreement and Plan of Reorganization                  **

 3.1              Articles of Incorporation                             ***

 3.2              By-Laws                                               ***

21.1              List of Subsidiaries of Amexdrug                      ***
                  Corporation

31.1              Certification of Chief Executive Officer           This Filing
                  pursuant to Section 302 of the Sarbanes-
                  Oxley Act of 2002

31.2              Certification of Chief Financial Officer           This Filing
                  pursuant to Section 302 of the Sarbanes-
                  Oxley Act of 2002

32.1              Certification of Chief Executive Officer           This Filing
                  pursuant to Section 906 of the Sarbanes-
                  Oxley Act of 2002

32.2              Certification of Chief Financial Officer           This Filing
                  pursuant to Section 906 of the Sarbanes-
                  Oxley Act of 2002

                  Summaries of all exhibits  contained within this report are
                  modified in their entirety by reference to these Exhibits.

                  *    Exhibit 2.1 is incorporated by reference from
                       Amexdrug's Form 8-K Current Report filed December 21,
                       2001 as Exhibit No. 10.01.

                  **   Exhibit 2.2 is incorporated by reference from
                       Amexdrug's Form 8-K Current Report filed January 15,
                       2002 as Exhibit No. 10.01.

                  ***  Exhibit 3.1, 3.2 and 21.1  are incorporated by
                       reference from  Amexdrug's 2001 Form 10-KSB filed on
                       April 1, 2002.





                                      -45-




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