UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q




(Mark
One)




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




For
the quarterly period ended June 30, 2009




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




For
the transition period from 
to





Commission
File Number 0-13117





HealthWarehouse.com,
Inc.


(Exact
Name of Registrant as Specified in Its Charter)




Delaware
            
            22-2413505(State
      or Other Jurisdiction
            
            (I.R.S.
      Employerof
      Incorporation or Organization)
            
            Identification
      No.)





100 Commerce
      Boulevard, Cincinnati, Ohio
            
            45140(Address
      of Principal Executive Offices)
            
            (Zip
      Code)





(513)
618-0911


(Registrant’s
Telephone Number, Including Area Code)





Clacendix,
Inc., 2001 Route 46, Parsippany, New Jersey 07054





(Former
Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)


Indicate  by
check mark whether the registrant (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   ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).     Yes   ̈    No   ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):




Large
      Accelerated Filer o
            Accelerated
      Filer  oNon-accelerated
      Filer o
            Smaller
      Reporting Company  x(Do
      not check if a smaller reporting company)




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





As
of August 17, 2009, there were 189,393,379 shares of common stock
outstanding.









HEALTHWAREHOUSE.COM,
INC.





QUARTERLY
REPORT ON FORM 10-Q


FOR
THE QUARTERLY PERIOD ENDED JUNE 30, 2009




TABLE OF
CONTENTS




PagePART
      I. FINANCIAL INFORMATIONITEM
      1. Financial Statements
            1ITEM
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
            15ITEM
      3. Quantitative and Qualitative Disclosures About Market Risk
            22ITEM
      4T. Controls and Procedures
            22PART
      II. OTHER INFORMATIONITEM
      1. Legal Proceedings
            23ITEM
      1A. Risk Factors
            23ITEM
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
            23ITEM
      3. Defaults upon Senior Securities
            24ITEM
      4. Submission of Matters to a Vote of Security Holders
            24ITEM
      5. Other Information
            24ITEM
      6. Exhibits
            24SIGNATURES
            25









PART
I. FINANCIAL INFORMATION





ITEM
1. Financial Statements







The
condensed consolidated financial statements included herein have been prepared
by us without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations. It is suggested
that these financial statements be read in conjunction with the audited
financial statements and the notes thereto for the year ended December 31, 2008
included in our current report on Form 8-K as filed on May 15, 2009 with the
Securities and Exchange Commission.




1




HEALTHWAREHOUSE.COM,
INC. AND SUBSIDIARY


CONDENSED
CONSOLIDATED BALANCE SHEETS




AssetsJune
      30, 2009
                    
                    
                    December
      31, 2008(Unaudited)Current
      assetsCash
      and cash equivalents
                    
                    $
                    1,415,538
                    
                    
                    $
                    357,938Accounts
      receivable
                    
                    
                    141,872
                    
                    
                    
                    12,317Inventories
      – finished good available for sale
                    
                    
                    439,870
                    
                    
                    
                    84,480Prepaid
      expenses and other current assets
                    
                    
                    183,861
                    
                    
                    
                    -Total
      current assets
                    
                    
                    2,181,141
                    
                    
                    
                    454,735Property
      and equipment, net
                    
                    
                    394,838
                    
                    
                    
                    315,969Website
      development costs
                    
                    
                    108,764
                    
                    
                    
                    70,397Total  assets
                    
                    $
                    2,684,743
                    
                    
                    $
                    841,101


Liabilities
      and Stockholders’ EquityCurrent
      liabilitiesAccounts
      payable – related parties
                                      
                                      $
                                      598,278
                                      
                                      
                                      $
                                      380,279Accounts
      payable – trade
                                      
                                      
                                      277,647
                                      
                                      
                                      
                                      156,448Accrued
      expenses
                                      
                                      
                                      205,758
                                      
                                      
                                      
                                      -Total
      current liabilities
                                      
                                      $
                                      1,081,683
                                      
                                      
                                      $
                                      536,727Convertible
      notes, net of deferred debt discount of $30,033
                                      
                                      
                                      1,169,967
                                      
                                      
                                      
                                      -Total
      liabilities
                                      
                                      
                                      2,251,650
                                      
                                      
                                      
                                      536,727Commitments
      and contingenciesStockholders’
      equityPreferred
      stock – par value $.001 per share; authorized 1,000,000 shares;200,000
      shares designated Series A; 155,557 shares issued andoutstanding
      (aggregate liquidation preference $280,003)
                                      
                                      
                                      156
                                      
                                      
                                      
                                      -Common
      stock – par value $.001 per share; authorized 750,000,000 shares;189,393,379and
      154,876,449shares issued and outstanding
                                      
                                      
                                      189,393
                                      
                                      
                                      
                                      154,876Additional
      paid-in capital
                                      
                                      
                                      1,708,843
                                      
                                      
                                      
                                      827,456Accumulated
      deficit
                                      
                                      
                                      (1,465,299
                                      )
                                      
                                      
                                      (677,958
                                      )Total
      stockholders’ equity
                                      
                                      
                                      433,093
                                      
                                      
                                      
                                      304,374Total
      liabilities and stockholders’ equity
                                      
                                      $
                                      2,684,743
                                      
                                      
                                      $
                                      841,101





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




2





HEALTHWAREHOUSE.COM,
INC. AND SUBSIDIARY


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)





For
      the Three Months Ended
                June
      30, 2009
              
              
              For
      the Three Months Ended
                June
      30, 2008
              
              
              For
      the Six Months Ended
                June
      30, 2009
              
              
              For
      the Six Months Ended
                June
      30, 2008Net
      sales
              
              $
              858,443
              
              
              $
              221,023
              
              
              $
              1,665,585
              
              
              $
              330,372Cost
      of sales
              
              
              615,131
              
              
              
              175,631
              
              
              
              1,188,820
              
              
              
              253,549Gross
      profit
              
              
              243,312
              
              
              
              45,392
              
              
              
              476,765
              
              
              
              76,823Operating
      expenses:Selling,
      general and administrative expenses
              
              
              612,814
              
              
              
              139,579
              
              
              
              1,227,100
              
              
              
              245,521Depreciation
      expense
              
              
              10,612
              
              
              
              -
              
              
              
              21,224
              
              
              
              -Total
      operating expenses
              
              
              623,426
              
              
              
              139,579
              
              
              
              1,248,324
              
              
              
              245,521Loss
      from operations
              
              
              (380,114
              )
              
              
              (94,187
              )
              
              
              (771,559
              )
              
              
              (168,698
              )Other
      income
              
              
              -
              
              
              
              274
              
              
              
              -
              
              
              
              274Interest
      expense
              
              
              (13,777
              )
              
              
              -
              
              
              
              (13,402
              )
              
              
              -Loss
      before income taxes
              
              
              (393,891
              )
              
              
              (93,913
              )
              
              
              (784,961
              )
              
              
              (168,424
              )Income
      tax expense
              
              
              (2,380
              )
              
              
              -
              
              
              
              (2,380
              )
              
              
              -Net
      loss
              
              $
              (396,271
              )
              
              $
              (93,913
              )
              
              $
              (787,341
              )
              
              $
              (168,424
              )Per
      share data:Net
      loss per common shareBasic
      and diluted
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )Weighted
      average number of common shares outstandingBasic
      and diluted
              
              
              172,257,363
              
              
              
              154,876,449
              
              
              
              163,692,251
              
              
              
              154,876,449




The
accompanying notes are an integral part of these condensed consolidated
financial statements




3





HEALTHWAREHOUSE.COM,
INC. AND SUBSIDIARY


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)




For
      the Six Months
                              Ended
      June 30, 2009
                            
                            
                            For
      the Six Months
                              Ended
      June 30, 2008Cash
      flows from operating activitiesNet
      loss
                            
                            $
                            (787,341
                            )
                            
                            $
                            (168,423
                            )Adjustments
      to reconcile net loss to net cash from operating
    activities:Depreciation
      and amortization
                            
                            
                            21,224
                            
                            
                            
                            -Non-cash
      stock-based compensation
                            
                            
                            125,641
                            
                            
                            
                            -Amortization
      of deferred debt discount
                            
                            
                            15,420
                            
                            
                            
                            -Changes
      in operating assets and liabilities:Accounts
      receivable
                            
                            
                            (129,555
                            )
                            
                            
                            (7,898
                            )Inventories
      – finished goods available
                            
                            
                            (355,390
                            )
                            
                            
                            -Prepaid
      expenses and other current assets
                            
                            
                            (183,861
                            )
                            
                            
                            (660
                            )Accounts
      payable – trade
                            
                            
                            (26,078
                            )
                            
                            
                            341,825Accounts
      payable – related parties
                            
                            
                            217,999
                            
                            
                            
                            -Accrued
      expenses
                            
                            
                            37,227
                            
                            
                            
                            -Net
      cash (used in)/provided by operating activities
                            
                            
                            (1,064,714
                            )
                            
                            
                            164,844Cash
      flow from investing activitiesCash
      received in share exchange
                            
                            
                            1,220,520
                            
                            
                            
                            -Expenses
      paid in conjunction with share exchange
                            
                            
                            (225,000
                            )
                            
                            
                            -Acquisition
      of property and equipment
                            
                            
                            (100,093
                            )
                            
                            
                            (170,270
                            )Website
      development costs
                            
                            
                            (38,367
                            )
                            
                            
                            (76,810
                            )Net
      cash provided by (used in) investing activities
                            
                            
                            857,060
                            
                            
                            
                            (247,080
                            )Cash
      flows from financing activitiesProceeds
      from sale of common stock
                            
                            
                            50,196
                            
                            
                            
                            170,000Proceeds
      from option/warrant exercises
                            
                            
                            15,058
                            
                            
                            
                            -Proceeds
      from sale of convertible debentures
                            
                            
                            1,200,000
                            
                            
                            
                            -Net
      cash provided by financing activities
                            
                            
                            1,265,254
                            
                            
                            
                            170,000Net
      increase in cash and cash equivalents
                            
                            
                            1,057,600
                            
                            
                            
                            87,764Cash
      and cash equivalents – beginning of period
                            
                            
                            357,938
                            
                            
                            
                            32,828Cash
      and cash equivalents – end of period
                            
                            $
                            1,415,538
                            
                            
                            $
                            120,592




Non-cash
      investing and financing activities:Net
      assets received in share exchangeCash
                                              
                                              $
                                              1,220,520Accounts
      payable
                                              
                                              
                                              (147,276
                                              )Accrued
      expenses
                                              
                                              
                                              (168,531
                                              )Net
      Assets
                                              
                                              $
                                              904,713





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




4





HEALTHWAREHOUSE.COM, INC. AND
SUBSIDIARY


Notes to Condensed
Consolidated Financial Statements





1.  Organization, Basis of
Presentation and Reverse Recapitalization





HealthWarehouse.com,
Inc. (together with its subsidiary, the “Company”) wasformed
as a New Jersey corporation in 1982 as MicroFrame, Inc. for the purpose
of  designing, developing  and  marketing a
broad  range  of  remote  network
management and remote  maintenance  and
security  products for mission  critical voice and data
communications networks.  In March 1999,the
Companypurchased
all of the outstanding share capital of SolCom Systems Limited, a company
incorporated under the Companies Act 1985 of the United
Kingdom.  SolCom was a developer of remote monitoring
technology.  Simultaneously with the consummation of the SolCom
acquisition,the
Companyreincorporated
in the State of Delaware and in the process changeditsname
to ION Networks, Inc. As ION Networks,the
Companydeveloped
and manufactured software and hardware solutions for monitoring and managing
mission-critical voice, data, video and environmental applications and
networking systems. In December 2007,the
Companysold
substantially all ofitsoperating
assets to Cryptek, Inc., a Delaware corporation. Pursuant to the Cryptek sale,the
Companychangeditsname
to Clacendix, Inc. Following the date of the Cryptek sale and until the closing
of the share exchange transaction with Hwareh.com,
Inc.,Clacendixexisted
as a shell company with no operations that was seeking a target company with
which to merge or to complete a business combination.





On
May 14, 2009,Clacendixcompleted
a share exchange transaction pursuant to the terms of a Securities Exchange
Agreement, dated as of May 14, 2009.  Under the Securities Exchange
Agreement,Clacendixacquired
all the outstanding capital stock of Hwareh.com, Inc. (formerly named
HealthWarehouse.com, Inc.). As a result of the exchange,the
former stockholdersHwareh.com,
Inc. owned 155,194,563 shares or approximately 82.4% of the outstanding shares
of common stock of the Company. This transaction was accounted for as a reverse
merger and recapitalization, whereby Hwareh.com, Inc. is deemed to be the
accounting acquirer for accounting purposes.Following
the closing of the share exchange transaction with Hwareh.com,Clacendixsucceeded
to the business of Hwareh.com asitssole
line of business.  Effective August 5, 2009,Clacendixchangeditscorporate
name to HealthWarehouse.com, Inc.





The
Company is a U.S. licensed virtual retail pharmacy (“VRP”) and healthcare
e-commerce company that sells brand name and generic prescription drugs as well
as over-the-counter (“OTC”) medical products. The Company’s objective is to be
viewed by individual healthcare product consumers as a low-cost, reliable and
hassle-free provider of prescription drugs and OTC medical
products.





The
Company is presently licensed as a mail-order pharmacy for sales to 37 states
and the District of Columbia, and intends to apply for and obtain licenses to
sell prescriptions in all 50 states by the end of 2009. The Company has begun
accepting health insurance as part of its prescription program, contracting with
insurance providers based on customer demand and business
opportunity.




The
condensed consolidated financial statements have been prepared in accordance
with U.S. GAAP for certain financial information as the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, the condensed consolidated
balance sheet as of June 30, 2009, the condensed consolidated statements of
operations for the three and six months ended June 30, 2009 and 2008 and cash
flows for the six months ended June 30, 2009 and 2008, have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include normal recurring adjustments) necessary to make the Company's financial
position, results of operations and cash flows at June 30, 2009 and for the
three and six months ended June 30, 2009 and 2008 not misleading have been
made.  The results of operations for the three months ended June 30,
2009 and 2008 are not necessarily indicative of results that would be expected
for the full year or any other interim period.





Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is suggested that
these financial statements be read in conjunction with the financial statements
and notes thereto included in the current report on Form 8-K filed with the
Securities and Exchange Commission on May 15, 2009.




5




2. Summary of Significant Accounting
Policies





Principles of
Consolidation





The accompanying consolidated financial
statements include the accounts of HealthWarehouse.com, Inc. andHwareh.com,Inc., its wholly-owned subsidiary. All
material inter-company balances and transactions have been eliminated in
consolidation.





Cash and Cash
Equivalents





The Company considers all highly liquid
investments with a maturity of three months or less at the time of purchase to
be cash equivalents.





Property and
Equipment





Property and equipment are stated at
cost. Depreciation is calculated using the straight-line method over the
estimated useful lives of the assets, which are generally two to five years.
Expenditures for maintenance and repairs, which do not extend the economic
useful life of the related assets, are charged to operations as incurred. Gains
or losses on disposal of property and equipment are reflected in the statements
of operations in the period of disposal.





Website Development
Costs





In accordance with Emerging Issues Task
Force (“EITF”) Issue No. 00-2, “Accounting for Web Site Development Costs,” the
Company capitalized $38,367 and $76,810 of website development costs for the six
months ended June 30, 2009 and 2008, respectively.No amortization expense has been
recorded through June 30, 2009 as the capitalized projects have not been
completed.





Shipping and Handling
Costs





Shipping and handling costs incurred are
not billed to the customer and are recognized in selling, general and
administrative expenses. Such amounts aggregated approximately $60,700 and
$132,340 for the three and six months ended June 30, 2009 and $723 and $2,126
for the three and six months ended June 30, 2008,
respectively.





Fair Value of Financial
Instruments





The carrying value of items included in
working capital approximates fair value because of the relatively short maturity
of these instruments. The convertible debt approximates fair value because the
terms are substanially similar to similar debt in the
marketplace.





Net Income/(Loss) Per Share of Common
Stock





Basic net loss per share is computed by
dividing net loss attributable to common shareholders by the weighted average
number of common shares outstanding during the period.  Diluted net loss
per share reflects the potential dilution that could occur if securities or
other instruments to issue common stock were exercised or converted into common
stock.  Potentially dilutive securities of 51,597,301 at June 30, 2009 are
excluded from the computation of diluted net loss per share as their inclusion
would be antidilutive. These potentially dilutive securities consisted of
30,285,678 options, 3,721,182 warrants, 15,855,227 convertible notes and
1,555,570 convertible preferred stock. The Company had no potentially dilutive
securities at June 30, 2008.




6




Stock-Based
Compensation





The Company accounts for stock-based
compensation in accordance with thefair valuerecognition provisions ofStatement of Financial Accounting
Standards (“SFAS”)No. 123R. Stock-based compensation
expense for allstock-based payment awards is based on the
grant-date fair value estimated in accordance with the provisions of SFAS No.
123R. The Company recognizes these compensation costs over the requisite service
period of the award, which is generally the option vesting term.  Option
valuation models require the input of highly subjective assumptions including
the expected life of the option.Because the Company’semployee stock optionshave characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect thefair value estimate, in management’s opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employee
stock options. The fair value ofstock-based payment awards was estimated
using the Black-Scholes option pricing modelusing a volatility figure derived from
an index of comparable entities.Management will review this assumption
as the Company’s trading history becomes a better indicator of
value.The Company accounts
for the expected life of options in accordance with the “simplified” method
provisions of SEC Staff Accounting Bulletin (“SAB”) No. 110 (December 2007),
which enables the use of the simplified method for “plain vanilla” share options
as defined in SAB No. 107.





Stock-based compensation for the three andsix monthsendedJune 30, 2009was recorded in the consolidated
statements of operationsin
selling general and administrative line item and totaled $125,641. There
was no stock-based compensation incurred during the six month period ended June
30, 2008.





The fair value ofstock-based payment awards was estimated
using the Black-Scholes pricing model with the following assumptions and
weighted averagefair
valuesas
follows:




Six
      Months Ended
              June 30,
      2009Risk-free
      interest rate
            
            0.98%Dividend
      yield
            
            N/AExpected
      volatility
            
            57.6%Expected
      life in years
            
            5Expected
      forfeiture rate (through term)
            
            0%





3.  Income
Taxes





The Company adopted the provisions
of Financial Accounting Standards Board (“FASB”) Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes – an interpretation ofFASB StatementNo. 109” (“FIN 48”). FIN 48 prescribes
a recognition threshold and a measurement attribute for thefinancial statementrecognition and measurement of tax
positions taken or expected to be taken in atax return. For those benefits to be recognized, a
tax position must be more likely than not to be sustained upon examination by
taxing authorities. Differences between tax positions taken or expected to be
taken in a tax return and the benefit recognized and measured pursuant to the
interpretation are referred to as “unrecognized benefits.” A liability is
recognized (or amount of net operating loss carry forward or amount of tax
refundable is reduced) for an unrecognized tax benefit because it represents an
enterprise’s potential future obligation to the taxing authority for a tax
position that was not recognized as a result of applying the provisions of FIN
48.




7




In accordance with FIN 48, interest
costs related to unrecognized tax benefits are required to be calculated (if
applicable) and would be classified as “Interest expense” in the consolidated statements of
operations. Penalties would be recognized as a component of “Selling, general
and administrative expenses.”




In many cases the Company’s tax
positions are related to tax years that remain subject to examination by
relevant tax authorities. The Company filesincome tax returnsin the United States (federal) and in
various state and local jurisdictions. In most instances, the Company is no
longer subject to federal, state and local income tax examinations by tax
authorities for years prior to 2005.




The adoption of the provisions of FIN 48
on January 1, 2009 did not have a material impact on the Company’s
consolidated financial position and results of operations. As of June 30, 2009,
the Company believes that there are no significant uncertain tax positions
requiring recognition in theseconsolidated financial
statements.





The Company consummated a share exchange
transaction with Hwareh.com, Inc on May 14, 2009.The share exchange transaction is being
accounted for as a “reverse recapitalization,” since the former stockholders of
Hwareh.com own a majority of the outstanding shares ofthe Company’scommon stock immediately following the transaction,
andHwareh.com is deemed to
be the accounting acquirer in the transaction.As a result, at June 30, 2009,
due to the change in control under Section 382 of the Internal Revenue Code,
utilization of any pre-share exchange tax benefits would be substantially
limited.





4. Convertible Debt





In contemplation of and contingent to
closing the share exchange transaction, in the quarter ended June 30, 2009,
Hwareh.com, Inc. received the proceeds of convertible promissory notes
aggregating $1,200,000.The notes have a maturity date of two
years from the date of issuance and bear interest at 3.25% per annum, payable
quarterly in arrears and in full upon conversion. The notes are convertible into
15,855,227 shares ofthe
Company’scommon stock at
an effective conversion price of $0.0756848 per share.  The notes
are convertible at any time at the option of the holder.The Companycan also cause the conversion of the
notes atitsoption at any time before maturity and
after the shares ofthe
Company’scommon stock that
are issuable upon conversion of the notes have been registered for resale
pursuant to an effective registration statement. The notes have customary
anti-dilution provisions in connection with any split, subdivision or
combination of our common stock. Payment of principal, if not converted, and
interest under the notes has been guaranteed bythe Company’sPresident and Chief Executive
Officerand a 10% or
greater stockholder.(See
also Note 9.) The debt discount applicable to the notes from the
issuance of warrants along with the notes was $45,453 (see
below). As of June 30, 2009, none of theHwareh.com convertible promissory
noteshad been
converted.





In connection with the issuance of the
Hwareh.com convertible promissory notes, Hwareh.com also issued warrants to
purchase common stock forup to 8,068,197 shares ofthe Company’scommon stock (warrants expiring on May 31, 2009, June
30, 2009 and December 31, 2009 to purchase up to a maximum of 927,833, 3,570,182
and 3,570,182 shares, respectively, ofthe Company’scommon stock at an exercise price of
$0.0010778, $0.0560196 and $0.0560196 per share, respectively).Ofthesewarrants, warrants to purchase 927,833
shares ofthe
Company’scommon stockwereexercisedon May 31, 2009, warrants to purchase up to 3,570,182
shares ofthe
Company’scommon stock
expiredon June 30, 2009without being exercised and
warrants to purchase up to 3,570,182 shares ofthe Company’scommon stock remain
outstandingand expire on
December 31, 2009.The warrants have customary
anti-dilution provisions in connection with any split, subdivision or
combination ofthe
Company’scommon
stock.The fair value ofthe warrantswas estimatedas $45,453using the Black-Scholes option pricing
model.




The
convertible promissory notes and warrants have registration rights with respect
to the shares of the Company’s common stock that are issuable upon conversion or
exercise of the notes or warrants, respectively. The Company was obligated to
file an initial registration statement providing for the resale of the shares of
the Company’s common stock underlying the convertible promissory notes and
warrants by August 12, 2009, and to use its best efforts to have the
registration statement declared effective as soon as practicable thereafter.
Since the Company did not file on or before August 12, 2009, it must pay
liquidated damages of $12,000 in the aggregate, an amount equal to 1% of the
aggregate investment amount; however, the Company is currently in discussions
with the holders to waive these penalties.




8




5. Stockholders’
Equity





Common Stock





Details ofoutstanding shares of common
stockare as
follows:





SharesRecapitalized
      shares of Hwareh.com, Inc.'s stockholders
                      
                      
                      155,194,563Shares
      of HealthWarehouse.com, Inc.'s stockholders at exchange
                      
                      
                      33,056,161Warrants
      exercised
                      
                      
                      1,052,833Options
      exercised
                      
                      
                      89,822Common
      stock shares outstanding at June 30, 2009
                      
                      
                      189,393,379








On May
31, 2009, the holder of a warrant exercised (see Note 4) that warrant, at an
exercise price of $0.0010778 per share or $1,000, and received 927,833 shares of
the Company’s common stock.





On June
10, 2009 a former board of director member and holder of a warrant exercised
that entire warrant, at an exercise price of $0.05 per share or $6,250, and
received 125,000 shares of the Company’s common stock. In a separate transaction
on the same day, the same person exercised stock options to purchase 89,822
shares of common stock at an average price of $0.0869 per share or
$7,808.





Preferred Stock





The Company has designated 200,000 of
the 1,000,000 authorized shares of preferred stock as Series A Preferred Stock
(“Preferred Stock”). The Preferred Stock is non-voting, has a standard
liquidation preference equal to its purchase price, and does not pay dividends.
As of June 30, 2009, there were 155,557 shares of Preferred Stock outstanding,
which are convertible to 1,555,570 shares of common stock. The holders can call
the conversion of the Preferred Stock at any time.





Incentive
Compensation/Stock Option Plans





On May 15, 2009,the Companyadoptedits2009 Incentive Compensation Plan (the“2009 Plan”). The total number of shares of common
stock that may be subject to the granting of awards under the 2009 Plan is
30,000,000, plus 3,628,500 shares that remained available to be
issued on May 15, 2009 and were assumed as part of the share exchange from
Clacendix' previously existing stock option plans. The 2009 Plan imposes individual
limitations on the amount of certain awards. Under these limitations, during any
fiscal year of the Company, the number of options, stock appreciation rights,
shares of restricted stock, shares of deferred stock, performance shares and
other stock based-awards granted to any one participant under the 2009 Plan may
not exceed 5,000,000 shares, subject to adjustment in certain circumstances. The
maximum amount that may be paid out as performance units in any 12-month
performance period is an aggregate value of $2,000,000, and the maximum amount
that may be paid out as performance units in any performance period greater than
12 months is an aggregate value of $4,000,000. The maximum term of each
option or stock appreciation right, the times at which each option or stock
appreciation right will be exercisable, and provisions requiring forfeiture of
unexercised options or stock appreciation rights at or following termination of
employment generally are fixed by the committee, except that no option or stock
appreciation right may have a term exceeding ten years. The exercise price per
share subject to an option and the grant price of a stock appreciation rights
are determined by the committee, but in the case of an incentive stock option
(ISO) must not be less than the fair market value of a share of common stock on
the date of grant.




9




On May
15, 2009, the Company granted stock options to purchase up to 8,436,000 shares
of its common stock under the 2009 Plan, with an exercise price of $0.04 per
share. Of these stock options, (a) 4,218,000 vested immediately, have a
five-year term, and are valued at $60,739 using the Black-Scholes option pricing
model and (b) 4,218,000 vest 33.33% on May 15, 2010 and then an additional 8.33%
vest on the last day of each calendar quarter commencing on May 15, 2010, have a
ten-year term, and are valued at $97,248 using the Black-Scholes option pricing
model.





On May
20, 2009, the Company granted stock options to purchase up to 21,250,000 shares
of its common stock under the 2009 Plan, with exercise prices ranging from $0.10
to $0.11 per share.  These stock options vest 33.33% on May 20, 2010,
33.33% on May 20, 2011 and 33.33% on May 20, 2012. Of these stock options, (a)
5,000,000 have an exercise price of $0.11 per share and a five-year term, and
are valued at $213,687 using the Black-Scholes option pricing model and (b)
16,250,000 have an exercise price of $0.10 per share and a ten-year term, and
are valued at $936,633 using the Black-Scholes option pricing model





As ofJune 30, 2009, stock options to purchase up to
29,686,000 shares of common stock have been awarded under the 2009 Plan, with
exercise prices ranging from $0.04 to $0.11 per share, of which 4,218,000 are
exercisable. The aggregate stock compensation expense associated with the
aforementioned stock options totalled approximately $1,308,307, of which
$1,182,666 remains unamortized as of June 30, 2009, such amount will be
amortized on a straight-line basis over three years.




10




Details of the options outstanding under
all plans are as follows:





Shares
            
            
            Weighted
      Average Exercise Price ($)
            
            
            Weighted-
              Average
              Remaining
              Contractual
              Term
            
            
            Aggregate
              Intrinsic
              ValueOptions
      outstanding at January 1, 2009
            
            
            -0-Assumed
      in exchange
            
            
            689,500
            
            
            $
            0.14
            
            
            
            2.50
            
            
            $
            0Granted
            
            
            29,686,000
            
            
            $
            0.08
            
            
            
            6.07
            
            
            $
            1,347,767Expired
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Canceled
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Exercised
            
            
            (89,822
            )
            
            $
            0.09
            
            
            
            -
            
            
            
            -Options
      outstanding at June 30, 2009
            
            
            30,285,678
            
            
            
            
            
            
            
            
            
            
            $
            1,347,767Options
      exercisable at June 30, 2009
            
            
            4,907,500
            
            
            $
            0.05
            
            
            
            5.94
            
            
            $
            371,450








Range
      of Exercise
            
            
            Number
              Outstanding
            
            
            Weighted
      Average Remaining Years of Contractual Life
            
            
            Weighted
      Average Exercise Price
            
            
            Number
      Exercisable
            
            
            Weighted
      Average Exercise Price$0.00
      – 0.10
            
            
            
            8,538,678
            
            
            
            5.85
            
            
            $
            0.04
            
            
            
            4,322,678
            
            
            $
            0.04$0.10
      – 0.25
            
            
            
            21,747,000
            
            
            
            6.07
            
            
            $
            0.10
            
            
            
            500,000
            
            
            $
            0.16$0.00
      – $0.25
            
            
            
            30,285,678
            
            
            
            6.06
            
            
            $
            0.09
            
            
            
            4,822,678
            
            
            $
            0.05





Warrants





Details ofoutstanding warrantsare as follows:





Shares
                      
                      
                      Weighted
      Average Exercise Price ($)
                      
                      
                      Weighted-
                        Average
                        Remaining
                        Contractual
                        Term
                      
                      
                      Aggregate
                        Intrinsic
                        ValueWarrants
      outstanding at January 1,2009
                      
                      
                      -0-Assumed
      in exchange
                      
                      
                      275,000
                      
                      
                      $
                      0.05
                      
                      
                      
                      0.15
                      
                      
                      $
                      22,000Granted
                      
                      
                      8,068,197
                      
                      
                      
                      0.05
                      
                      
                      
                      -
                      
                      
                      
                      645,455Expired
                      
                      
                      (3,570,183
                      )
                      
                      
                      0.05
                      
                      
                      
                      -
                      
                      
                      
                      285,614Exercised
                      
                      
                      (1,052,833
                      )
                      
                      
                      0.05
                      
                      
                      
                      -
                      
                      
                      
                      84,226Warrants
      outstanding at June 30, 2009
                      
                      
                      3,720,181
                      
                      
                      
                      0.05
                      
                      
                      
                      0.49
                      
                      
                      $
                      297,614





11




6. Commitments





Operating Leases





The
Company occupies approximately 16,000 square feet of office and storage space
under a Commercial Sublease Agreement with 100 Commerce Boulevard LLC. The
sublease has a monthly rental rate of $5,567and has a total value of
$116,904 from June 30, 2009 through March 2011, the expiration date.
The annual obligation under the sublease is $66,804 in the year ended June 30,
2010 and $50,103 in the year ended June 30, 2011.





Rent expense under operating lease for
the six months ended June 30, 2009 and 2008, was approximately $41,934and $0, respectively, and for the three months
ended June 30, 2009 and 2008, was approximately $16,701 and $0,
respectively.





7.  Contingent
Liabilities





In the normal course of business the
Company may be involved in legal proceedings, claims and assessments arising in
the ordinary course of business. Such matters are subject to many uncertainties,
and outcomes are not predictable with assurance. As of August 21, 2009,
management is not aware of any item existing that will have a significant impact
on the Company’s business or financial condition.




12




8.Concentrations





The Company maintains deposits in a
financial institution which is insured by the Federal Deposit Insurance
Corporation (“FDIC”). At various times, the Company has deposits in this
financial institution in excess of the amount insured by the
FDIC.




9. Related Party
Transactions





Lalit Dhadphale,the Company’sPresident and Chief Executive Officer,
and Cape Bear Partners LLC, a5% or greater stockholder, have guaranteed the
Company’sobligations undercertain convertible promissory notes with a principal value of
$1,200,000. The guarantees state
that Mr. Dhadphale and Cape Bear Partners LLC each guarantee the full payment of
principal and interest under the notes. The guarantees terminate with respect to
each note upon the earlier of repayment of principal and interest under each
note or conversion of the note to equity. In the event of note conversion, the
guarantees remain in place with respect to any interest due and unpaid through
the date of conversion until that interest has been paid.  The maximum
exposure of each of Mr. Dhadphale and Cape Bear Partners LLC
pursuant to the guarantees is $1,278,000.





The
Company occupies approximately 16,000 square feet of office and storage space
under a Commercial Sublease Agreement with 100 Commerce Boulevard LLC, an entity
controlled by Jason Smith.  Mr. Smith is also the Manager of Rock
Castle Holdings, LLC, a 10% or greater stockholder in the Company. Mr. Smith is
the son of the controlling stockholder of Masters Pharmaceutical, Inc., one ofthe Company’sprincipal suppliers from
whom the Company purchased  $997,043 and $295,809 of supplies during
the six months ended June 30, 2009 and 2008, and $488,837 and $211,184 of
supplies during the three months ended June 30, 2009 and
2008, respectively.





Ron Ferguson, a former Hwareh.com
director, has guaranteed the Company’s obligations to supplier Prescription
Supply Inc. Mr. Ferguson is the spouse of Diane Ferguson, a stockholder ofthe Company. The guarantee, and Mr.
Ferguson’s maximum exposure under the guarantee, does not have a fixed dollar
limit.As of June 30,
2009, there were no obligations to Prescription Supply
Inc.




10.  New Accounting
Pronouncements





In July 2009, the FASB issuedSFASNo. 168,“The FASB AccountingCodificationand the Hierarchy of Generally AcceptedAccounting
Principles.”SFASNo. 168 supersedesSFASNo. 162 issued in May 2008.SFASNo. 168 will become the source of
authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied
by nongovernmental entities. Rules and interpretive releases of the Securities
and Exchange Commission (“SEC”) under authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. On the
effective date ofSFAS No.
168, the Codification will
supersede all then-existing non-SEC accounting and reporting standards. All
other nongrandfathered non-SEC accounting literature not included in the
Codification will become nonauthoritative.SFAS No. 168is effective for interim and annual
periods ending after September 15, 2009. The adoption ofSFASNo. 168 is not expected to materially
impact the Company’sconsolidatedfinancial position or results of
operations.




13




In June 2009 the FASB issued SFASNo.167,“Amendments to FASB Interpretation
No. 46(R).”SFASNo.167 eliminates Interpretation 46(R)’s
exceptions to consolidating qualifying special-purpose entities, contains new
criteria for determining the primary beneficiary, and increases the frequency of
required reassessments to determine whether a company is the primary beneficiary
of a variable interest entity. SFASNo.167 also contains a new requirement that
any term, transaction, or arrangement that does not have a substantive effect on
an entity’s status as a variable interest entity, a company’s power over a
variable interest entity, or a company’s obligation to absorb losses or its
right to receive benefits of an entity must be disregarded in applying
Interpretation 46(R)’s provisions. The elimination of the qualifying
special-purpose entity concept and its consolidation exceptions means more
entities will be subject to consolidation assessments and reassessments. SFASNo.167 will be effective January 1,
2010.The Company is in the process of
evaluating the impact of this pronouncement on its consolidated financial
position and results of operations.




In June 2009 the FASB issued SFASNo.166,“Accounting for Transfers ofFinancial Assets — an amendment ofFASB StatementNo. 140.”SFASNo.166 eliminates the concept of a
qualifying special-purpose entity, creates more stringent conditions for
reporting a transfer of a portion of a financial asset as a sale, clarifies
other sale-accounting criteria, and changes the initial measurement of a
transferor’s interest in transferred financial assets. SFASNo.166 will be effective January 1,
2010.The Company is in the process of
evaluating the impact of this pronouncement on its consolidated financial
position and results of operations.




In May 2009, the FASB issued SFAS
No. 165,“Subsequent Events.”SFAS No. 165sets forth: 1) the period after thebalance sheetdate during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in thefinancial statements; 2) the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements; and 3) the disclosures that an entity should
make about events or transactions that occurred after the balance sheet date.SFAS No. 165is effective for interim and annual
periods ending after June 15, 2009. TheCompany adoptedSFAS No. 165in thequarter ended June30, 2009. Subsequent events were
evaluated through August 21, 2009, the date on which the financial statements
were issued.The adoption
of this pronouncementdid
not impact theCompany’s
consolidated financial position and results of operations.




In April
2009, the FASB issued FSP SFAS 157-4, “Determining Whether a Market Is Not
Active and a Transaction Is Not Distressed,” (“FSP FAS 157-4”) which provides
guidelines for making fair value measurements more consistent with the
principles presented in SFAS No. 157. FSP FAS 157-4 provides additional
authoritative guidance in determining whether a market is active or inactive and
whether a transaction is distressed, is applicable to all assets and liabilities
(i.e. financial and nonfinancial) and will require enhanced disclosures. This
standard is effective for periods ending after June 15, 2009. The adoption of
this policy did not have a material impact on the Company’s condensed
consolidated financial position and condensed consolidated results of
operations.




In June 2008, the Emerging Issues
Task Force (“EITF”) reached a consensus in Issue No. 07-5, “Determining
Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock”
(“EITF 07-5”). EITF 07-5 addresses the determination of whether an instrument
(or an embedded feature) is indexed to an entity’s own stock, which is the first
part of the scope exception in paragraph 11(a) of SFAS No. 133. EITF 07-5 is
effective forfiscal
yearsbeginning after
December 15, 2008, and interim periods within thosefiscal years. Early application is not permitted.
The adoption of EITF No. 07-5 did not have a material impact on the Company’sfinancial
statements.





InDecember 2007, the FASB issued SFAS No. 141R,
“Business
Combinations,” which
replaces SFAS No. 141, “Business Combinations.” SFAS No. 141R establishes principles
and requirements for determining how an enterprise recognizes and measures thefair valueof certainassets and liabilitiesacquired in abusiness combination, including non-controlling interests,
contingent consideration and certain acquired contingencies. SFAS No. 141R also
requires acquisition-related transaction expenses and restructuring costs be
expensed as incurred rather than capitalized as a component of the business
combination. SFAS No. 141R is applicable prospectively to business combinations
for which the acquisition date was on or after the beginning of the first annual
reporting period beginning on or afterDecember 15, 2008. SFAS No. 141R would have an
impact on accounting for any businesses acquired after the effective date of
this pronouncement.




In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS
No. 157 establishes a single definition of fair value and a framework for
measuring fair value, sets out a fair value hierarchy to be used to classify the
source of information used in fair value measurements, and requires new
disclosures of assets and liabilities measured at fair value based on their
level in the hierarchy. This statement applies under other accounting
pronouncements that require or permit fair value measurements. In February 2008,
the FASB issued FSPs No. 157-1 and No. 157-2, which, respectively, remove
leasing transactions from the scope of SFAS No. 157 and defer its effective date
for one year relative to certain nonfinancial assets and liabilities. As a
result, the application of the definition of fair value and related disclosures
of SFAS No. 157 (as impacted by these two FSPs) was effective for the Company
beginning January 1, 2008 on a prospective basis with respect to fair value
measurements of (a) nonfinancial assets and liabilities that are recognized or
disclosed at fair value in our financial statements on a recurring basis (at
least annually) and (b) all financial assets and liabilities. This adoption did
not have a material impact on the Company’s consolidated results of operations
or financial condition. The remaining aspects of SFAS No. 157 for which the
effective date was deferred under FSP No. 157-2. Areas impacted by the deferral
relate to nonfinancial assets and liabilities that are measured at fair value,
but are recognized or disclosed at fair value on a nonrecurring basis. This
deferral applies to such items as nonfinancial assets and liabilities initially
measured at fair value in a business combination (but not measured at fair value
in subsequent periods) or nonfinancial long-lived asset groups measured at fair
value for an impairment assessment. The effects of these remaining aspects of
SFAS No. 157 are to be applied to fair value measurements prospectively
beginning January 1, 2009. The adoption of this pronouncement did not impact the
Company’s consolidated financial position and results of
operations.




14




ITEM 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations





Information
Regarding Forward-Looking Statements




This
report contains “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and uncertainties,
many of which are beyond our control.  Our actual results could differ
materially and adversely from those anticipated in such forward-looking
statements as a result of certain factors, including those set forth in this
report.  Important factors that may cause actual results to differ
from projections include, but are not limited to, for example:




·
            adverse
      economic conditions,




·
            inability
      to raise sufficient additional capital to operate our
      business,




·
            unexpected
      costs, lower than expected sales and revenues, and operating
      defects,




·
            adverse
      results of any legal proceedings,




·
            the
      volatility of our operating results and financial condition,
      and




·
            inability
      to attract or retain qualified senior management
  personnel.




All
statements, other than statements of historical facts, included in this current
report regarding our strategy, future operations, financial position, estimated
revenue or losses, projected costs, prospects and plans and objectives of
management are forward-looking statements.  When used in this report,
the words “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,”
“expect,” “project,” “plan” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements contain
such identifying words.  All forward-looking statements speak only as
of the date of this report.  We undertake no obligation to update any
forward-looking statements or other information contained
herein.  Stockholders and potential investors should not place undue
reliance on these forward-looking statements.  Although we believe
that our plans, intentions and expectations reflected in or suggested by the
forward-looking statements in this report are reasonable, we cannot assure
stockholders and potential investors that these plans, intentions or
expectations will be achieved.  We disclose important factors that
could cause our actual results to differ materially from its expectations under
“Risk Factors” in our annual reports and, most recently, in our current report
on Form 8-K filed on May 15, 2009.  These cautionary statements
qualify all forward-looking statements attributable to us or persons acting on
our behalf.




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




Overview




On May
14, 2009, we completed a share exchange transaction with Hwareh.com, Inc.
pursuant to the terms of a Securities Exchange Agreement, dated as of May 14,
2009. UndertheSecurities Exchange Agreement,weacquired all the outstanding capital
stock of Hwareh.com, Inc. (formerly named HealthWarehouse.com, Inc.). As a
result of the exchange,the
former stockholdersHwareh.com, Inc. owned approximately 82.4% of the
outstanding shares of our common stock. This transaction was accounted for as a
reverse recapitalization, whereby Hwareh.com, Inc. is deemed to be the
accounting acquirer for accounting purposes.Following the closing of the share
exchange transaction with Hwareh.com,wesucceeded to the business of Hwareh.com
asoursole line of
business.  Effective August 5, 2009,wechangedourcorporate name to HealthWarehouse.com,
Inc.




We are a
licensed U.S. pharmacy and healthcare e-commerce company that sells discounted
brand name and generic prescription drugs and over-the-counter (OTC) medical
products. Our web address is http://www.healthwarehouse.com. At present, we
sell:




15




·
            a
      range of prescription drugs (we are licensed as a mail-order pharmacy for
      sales to 37 states and the District of
  Columbia);




·
            diabetic
      supplies including glucometers, lancets, syringes and test
      strips;




·
            OTC
      medications covering a range of conditions from allergy and sinus to pain
      and fever to smoking cessation
aids;




·
            home
      medical supplies including incontinence supplies, first aid kits and
      mobility aids; and




·
            diet
      and nutritional products including supplements, weight loss aids, and
      vitamins and minerals.




Our
objective is to make the pharmaceutical supply chain more efficient by
eliminating costs and passing on the savings to the consumer.  We are
becoming known by consumers as a convenient, reliable, discount provider of over
the counter and prescription medications and products. We intend to continue to
expand our product line as our business grows. We are presently licensed as a
mail-order pharmacy for sales to 37 states and the District of Columbia, and we
intend to apply for and obtain licenses to sell prescriptions in all 50 states
by the end of 2009.




We have
begun accepting health insurance as part of our prescription program, initially
contracting with a limited number of insurance providers based on customer
demand and business opportunity. Our customers tend to be under or uninsured
consumers who rely on our service for their daily medications.  In
addition, due to the savings we pass on to the consumer, our prices are often
below insurance co-pay making insurance unnecessary when purchasing from us. We
intend to continue expanding the number of health insurance providers we accept
as customer demand warrants.




To date,
we have incurred operational losses for all historic periods.  We have
financed our activities to date through revenues from our online sales, the
proceeds from sales of our equity securities in private placement financings and
the proceeds from the issuance of our promissory notes in private
financings.




Results
of Operations




Three
months ended June 30, 2009 compared to three months ended June 30,
2008.




Three
      months ended
                  June
      30, 2009
                
                
                %
      of
                  Revenue
                
                
                Three
      months ended
                  June
      30, 2008
                
                
                %of
                  RevenueRevenue
                
                $
                858,443
                
                
                
                100.0
                %
                
                $
                221,023
                
                
                
                100.0
                %Cost
      of sales
                
                
                615,131
                
                
                
                71.6
                %
                
                
                175,631
                
                
                
                79.5
                %Gross
      profit
                
                
                243,312
                
                
                
                28.4
                %
                
                
                45,392
                
                
                
                20.5
                %Selling,
      general & administrative  expenses
                
                
                612,814
                
                
                
                71.4
                %
                
                
                139,579
                
                
                
                63.2
                %Depreciation
      expense
                
                
                10,612
                
                
                
                1.2
                %
                
                
                -
                
                
                
                -Total
      operating expenses
                
                
                623,426
                
                
                
                72.6
                %
                
                
                139,579
                
                
                
                63.2
                %Income
      from operations
                
                
                (380,114
                )
                
                
                (44.3
                )%
                
                
                (94,187
                )
                
                
                (42.6
                )%Interest
      income(expense)
                
                
                (13,777
                )
                
                
                (1.6
                )%
                
                
                (274
                )
                
                
                (0.1
                )
      %Net
      loss before taxes
                
                
                (393,891
                )
                
                
                (45.9
                )%
                
                
                (93,913
                )
                
                
                (42.5
                )%Income
      tax expense
                
                
                (2,380
                )
                
                
                (0.2
                )%
                
                
                -
                
                
                
                -Net
      loss
                
                $
                (396,271
                )
                
                
                (46.1
                )%
                
                $
                (93,913
                )
                
                
                (42.5
                )%





16




Revenue




Three months ended
                June 30,
      2009
              
              
              %
                Change
              
              
              Three months ended
                June 30,
      2008Total
      revenue
              
              $
              858,443
              
              
              
              228.4
              %
              
              $
              221,023Total
      customer orders shipped
              
              
              20,956
              
              
              
              475.0
              %
              
              
              3,645Total
      average net sales per order
              
              $
              41.0
              
              
              
              (32.3
              )
      %
              
              $
              60.6




Revenues
for the three months ended June 30, 2009 grew to $858,443 from $221,023 for the
three months ended June 30, 2008. Revenues increased for the three months ended
June 30, 2009 compared to corresponding period in the prior year as a result of
an increase in order volume.  This increase is due primarily to the
maturing of business activities from a company with limited operating
activities, the initial rollout of our prescription business model at the end of
2008, the impact of increased advertising and the issuance of new licenses to
sell prescription drugs by additional states.




Another
indicator of increased business activity was that our website attracted over
318,258 visits with over 1,162,215 pageviews during the second three months of
2009 compared to fewer than 55,518 visits and more than 195,949 pageviews during
the second three months of 2008.




Costs
and Expenses




Cost
of Sales and Gross Margin




Three
      months ended
                June
      30, 2009
              
              
              %
                Change
              
              
              Three
      months
                ended
                June
      30,2008Total
      cost of sales
              
              $
              615,131
              
              
              
              250.2
              %
              
              $
              175,631Total
      gross profit dollars
              
              $
              243,312
              
              
              
              436
              %
              
              $
              45,392Total
      gross margin percentage
              
              
              28.3
              %
              
              
              
              
              
              
              20.5
              %




Total
cost of sales increased for the three months ended June 30, 2009 as compared to
the three months ended June 30, 2008 as a result of growth in order volume and
revenue. Gross margin percentage increased year-over-year from 20.5% for the
three months ended June 30, 2008 to 28.3% for the three months ended June 30,
2009, due to a more representative relationship between revenues and cost of
sales per our business model as the amount of low-priced generic prescription
products became a larger portion of our mix of revenues.




Selling,
General and Administrative Expenses




Three
      months ended
                June
      30, 2009
              
              
              %
                Change
              
              
              Three
      months ended
                June
      30, 2008Selling,
      general and administrative expenses
              
              $
              612,814
              
              
              
              339
              %
              
              $
              139,579Percentage
      of revenue
              
              
              71.4
              %
              
              
              
              
              
              
              63.2
              %




Selling,
general and administrative expenses increased by $473,235 in the three months
ended June 30, 2009 compared to the same period in 2008, an increase of
339%.  The expense increases were due primarily to expenses related to
the maturing of business activities including increases of approximately
$237,685 for payroll, advertising, shipping and fulfillment expenses related to
revenue growth compared to the three months ended June 30, 2008.




17




Six
months ended June 30, 2009 compared to six months ended June 30,
2008.




Six
      months ended
              June
      30, 2009
            
            
            %
      of
              Revenue
            
            
            Six
      months ended
              June
      30, 2008
            
            
            %
      of
              RevenueRevenue
            
            $
            1,665,585
            
            
            
            100.0
            %
            
            $
            330,372
            
            
            
            100.0
            %Cost
      of sales
            
            
            1,188,820
            
            
            
            71.4
            %
            
            
            253,549
            
            
            
            76.7
            %Gross
      profit
            
            
            476,765
            
            
            
            28.6
            %
            
            
            76,823
            
            
            
            23.3
            %Selling,
      general and administrative expenses
            
            
            1,227,100
            
            
            
            73.7
            %
            
            
            245,521
            
            
            
            74.3
            %Depreciation
      expense
            
            
            21,224
            
            
            
            1.3
            %
            
            
            -
            
            
            
            -Total
      operating expenses
            
            
            1,248,324
            
            
            
            75
            %
            
            
            245,521
            
            
            
            74.3
            %Loss
      from operations
            
            
            (771,559
            )
            
            
            (46.3
            %)
            
            
            (168,698
            )
            
            
            (51.1
            %)Other
      income
            
            
            (13,402
            )
            
            
            (0.8
            %)
            
            $
            274
            
            
            
            (0.0
            %)Loss
      before income tax
            
            
            (784,961
            )
            
            
            (47.1
            %)
            
            
            (168,424
            )
            
            
            (51.1
            %)Income
      tax expense
            
            
            (2,380
            )
            
            
            (0.1
            %)
            
            
            -
            
            
            
            -Net
      loss
            
            $
            (787,341
            )
            
            
            (47.2
            %)
            
            $
            (168,424
            )
            
            
            (51.1
            %)




Revenue




Six months
                ended
                June 30,
      2009
              
              
              %
                Change
              
              
              Six months
                ended
                June 30,
      2008Total
      revenue
              
              $
              1,665,585
              
              
              
              404.2
              %
              
              $
              330,372Total
      customer orders shipped
              
              
              34,835
              
              
              
              483.0
              %
              
              
              5,975Total
      average net sales per order
              
              $
              47.8
              
              
              
              (15.7
              )%
              
              $
              55.3




Revenues
for the six months ended June 30, 2009 grew to $1,665,585 from $330,372 for the
six months ended June 30, 2008. Revenues increased for the six months ended June
30, 2009 compared to corresponding period in the prior year as a result of an
increase in order volume.  This increase is due primarily to the
maturing of business activities from a company with limited operating activities
and the initial rollout of the business model during 2008, the impact of
increased advertising and the issuance of new licenses to sell prescription
drugs by additional states.




Another
indicator of increased business activity was that our website attracted over
546,840 visits with over 2,047,426 pageviews during the first six months of 2009
compared to fewer than 104,476 visits and more than 359,740 pageviews during the
first six months of 2008.




18




Costs
and Expenses




Cost
of Sales and Gross Margin




Six
      months
                ended
                June
      30, 2009
              
              
              %
                Change
              
              
              Six
      months
                ended
                June
      30,2008Total
      cost of sales
              
              $
              1,188,820
              
              
              
              368.9
              %
              
              $
              253,549Total
      gross profit dollars
              
              $
              476,764
              
              
              
              520.6
              %
              
              $
              76,823Total
      gross margin percentage
              
              
              28.6
              %
              
              
              
              
              
              
              23.3
              %




Total
cost of sales increased for the six months ended June 30, 2009 as compared to
the six months ended June 30, 2008 as a result of growth in order volume and
revenue. Gross margin percentage increased year-over-year from 23.3% for the six
months ended June 30, 2008 to 28.6% for the six months ended June 30, 2009, due
to a more representative relationship between revenues and cost of sales per our
business model as the amount of low-priced generic prescription products became
a larger portion of our mix of revenues.




Selling,
General and Administrative Expenses




Six months
                ended
                June 30,
      2009
              
              
              %
                Change
              
              
              Six months
                ended
                June 30,
      2008Selling,
      general and administrative expenses
              
              $
              1,227,100
              
              
              
              399.8
              %
              
              $
              245,521Percentage
      of revenue
              
              
              73.7
              %
              
              
              
              
              
              
              74.3
              %






Selling,
general and administrative expenses increased by $981,579 in the six months
ended June 30, 2009 compared to the same period in 2008, an increase
of  399.8%.  The expense increases were due primarily to
expenses related to the maturing of business activities including increases of
approximately $405,997 for payroll, advertising, shipping and fulfillment
expenses related to revenue growth compared to the six months ended June 30,
2008.




Off-Balance
Sheet Arrangements




We have
not entered into any transactions with unconsolidated entities in which we have
financial guarantees, subordinated retained interests, derivative instruments or
other contingent arrangements that expose us to material continuing risks,
contingent liabilities or any other obligations under a variable interest in an
unconsolidated entity that provides us with financing, liquidity, market risk or
credit risk support.




Impact
of Inflation




We
believe that inflation has not had a material impact on our results of
operations for the six months ended June 30, 2009 and 2008. We cannot assure you
that future inflation will not have an adverse impact on our operating results
and financial condition.




Liquidity
and Capital Resources




Since our
inception, we have financed operations through product sales to
customers, and debt and private equity investment by existing stockholders,
officers and directors.




19




As of
June 30, 2009, we had approximately $1.4 million in cash and cash
equivalents.  We estimate that our existing cash, combined with our
revenues, will be sufficient to fund current operations for at least the next 12
months.




Our
management anticipates that we should achieve breakeven profitibility by
the end of the fourth quarter of 2009. We attribute our anticipated increased
profitability to the re-launch of our website in September 2009; with the
website’s improved functionality, our conversion rate should improve,
translating into significant growth of our OTC product sales. The anticipated
increase in our OTC product sales, as well as the launching of our first direct
partnership with a health care provider beginning on September 1, 2009, should
increase revenues.
 
 In
addition, our cash needs to fund the anticipated growth should be mitigated
somewhat since we are able to source items in 24 hours, thereby reducing the
amount of inventory we need to carry. Furthermore, our customers usually
purchase their products with an upfront credit card payment, and we typically
have terms of 30-60 days with our suppliers.
  We also
anticipate that during the third and fourth quarters of 2009, we will increase
our number of suppliers, which should have a positive impact on gross margin due
to increased competition.




If our
plans or assumptions change or prove to be inaccurate, we may be required to
seek additional capital through one or more financings.  If we need to
raise additional funds, we may not be able to do so on terms favorable to us, or
at all.  If we cannot raise sufficient funds on acceptable terms, we
may have to curtail our level of expenditures and scope of
operations.




With our
revenues expected to grow, we anticipate that our cash flow from operating
activities will be a growing source of funds for us. Assuming we achieve cash
flow breakeven, we intend to seek to secure a standby secured asset line to fund
asset acquisitions particularly for inventory growth.  Our operating
model calls for payment by the customer via credit card prior to when the
products are due to be paid to our vendors.  Accordingly, controlling
inventory exposure will be an important operating objective for us.




Critical
Accounting Policies and Estimates




The preparation of our consolidated
financial statements in conformity with accounting principles generally accepted
in the United States of America requires our management to exercise its
judgment. We exercise considerable judgment with respect to establishing sound
accounting polices and in making estimates andassumptionsthat affect the reported amounts of our
assets and liabilities, our recognition of revenues and expenses, and
disclosures of commitments and contingencies at the date of the financial
statements.




On an ongoing basis, we evaluate our
estimates and judgments. We base our estimates and judgments on a variety of
factors including our historical experience, knowledge of our business and
industry, current and expected economic conditions, the composition of our
products/services and the regulatory environment.  We periodically
re-evaluate our estimates and assumptions with respect to these judgments and
modify our approach when circumstances indicate that modifications are
necessary.




While we
believe that the factors we evaluate provide us with a meaningful basis for
establishing and applying sound accounting policies, we cannot guarantee that
the results will always be accurate.   Since the determination of
these estimates requires the exercise of judgment, actual results could differ
from such estimates.




We accountfor stock-based compensation in
accordance with the fair value recognition provisions ofStatement of Financial Accounting
Standards (“SFAS”)No. 123R. Stock-based compensation
expense for allstock-based payment awards is based on the
grant-date fair value estimated in accordance with the provisions of SFAS No.
123R.We
recognizethese
compensation costs over the requisite service period of the award, which is
generally the option vesting term.  Option valuation models require the
input of highly subjective assumptions including the expected life of the
option.Becauseouremployee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, inourmanagement’s opinion, the existing models do not
necessarily provide a reliable single measure of the fair value ofouremployee stock options. The fair value
ofstock-based payment awards was estimated
using the Black-Scholes option pricing modelusing a volatility figure derived from
an index of comparable entities.Our management will review this
assumption as our trading history becomes a better indicator of
value.Weaccount for the expected life of
options in accordance with the “simplified” method provisions of SEC Staff
Accounting Bulletin (“SAB”) No. 110 (December 2007), which enables the use of
the simplified method for “plain vanilla” share options as defined in SAB No.
107.




20




Recently-issued Accounting
Pronouncements




In July 2009, theFinancial Accounting Standards Board
(“FASB”)issuedSFASNo. 168,“The FASB AccountingCodificationand the Hierarchy of Generally AcceptedAccounting
Principles.”SFASNo. 168 supersedesSFASNo. 162 issued in May 2008.SFASNo. 168 will become the source of
authoritative U.S. generally accepted accounting principles (GAAP) recognized by
the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. On the
effective date ofSFAS No.
168, the Codification will
supersede all then-existing non-SEC accounting and reporting standards. All
other nongrandfathered non-SEC accounting literature not included in the
Codification will become nonauthoritative.SFAS No. 168is effective for interim and annual
periods ending after September 15, 2009. The adoption ofSFASNo. 168 is not expected to materially
impactourconsolidatedfinancial position or results of
operations.




In June 2009 the FASB issued SFASNo.167,“Amendments to FASB Interpretation
No. 46(R).”SFASNo.167 eliminates Interpretation 46(R)’s
exceptions to consolidating qualifying special-purpose entities, contains new
criteria for determining the primary beneficiary, and increases the frequency of
required reassessments to determine whether a company is the primary beneficiary
of a variable interest entity. SFASNo.167 also contains a new requirement that
any term, transaction, or arrangement that does not have a substantive effect on
an entity’s status as a variable interest entity, a company’s power over a
variable interest entity, or a company’s obligation to absorb losses or its
right to receive benefits of an entity must be disregarded in applying
Interpretation 46(R)’s provisions. The elimination of the qualifying
special-purpose entity concept and its consolidation exceptions means more
entities will be subject to consolidation assessments and reassessments. SFASNo.167 will be effective January 1,
2010.We arein the process of evaluating the impact
of this pronouncement onour(consolidated) financial position and
results of operations.




In June 2009 the FASB issued SFASNo.166,“Accounting for Transfers ofFinancial Assets — an amendment ofFASB StatementNo. 140.”SFASNo.166 eliminates the concept of a
qualifying special-purpose entity, creates more stringent conditions for
reporting a transfer of a portion of a financial asset as a sale, clarifies
other sale-accounting criteria, and changes the initial measurement of a
transferor’s interest in transferred financial assets. SFASNo.166 will be effective January 1,
2010.We arein the process of evaluating the impact
of this pronouncement onourconsolidated financial position and
results of operations.




In May 2009, the FASB issued SFAS
No. 165,“Subsequent Events.”SFAS No. 165sets forth: 1) the period after thebalance sheetdate during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in thefinancial statements; 2) the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date in its financial statements; and 3) the disclosures that an entity should
make about events or transactions that occurred after the balance sheet date.SFAS No. 165is effective for interim and annual
periods ending after June 15, 2009.WeadoptedSFAS No. 165in thequarter ended June30, 2009. Subsequent events
were evaluated through August 21, 2009, the date on which the financial
statements were issued.The adoption of this pronouncementdid not impactourconsolidated financial position and
results of operations.




In April
2009, the FASB issued FSP SFAS 157-4, “Determining Whether a Market Is Not
Active and a Transaction Is Not Distressed,” (“FSP FAS 157-4”) which provides
guidelines for making fair value measurements more consistent with the
principles presented in SFAS No. 157. FSP FAS 157-4 provides additional
authoritative guidance in determining whether a market is active or inactive and
whether a transaction is distressed, is applicable to all assets and liabilities
(i.e. financial and nonfinancial) and will require enhanced disclosures. This
standard is effective for periods ending after June 15, 2009. The adoption of
this policy did not have a material impact on our condensed consolidated
financial position and condensed consolidated results of
operations.




In June 2008, the Emerging Issues
Task Force (“EITF”) reached a consensus in Issue No. 07-5, “Determining
Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock”
(“EITF 07-5”). EITF 07-5 addresses the determination of whether an instrument
(or an embedded feature) is indexed to an entity’s own stock, which is the first
part of the scope exception in paragraph 11(a) of SFAS No. 133. EITF 07-5 is
effective forfiscal
yearsbeginning after
December 15, 2008, and interim periods within thosefiscal years. Early application is not permitted.
The adoption of EITF No. 07-5 did not have a material impact on ourfinancial
statements.




InDecember 2007, the FASB issued SFAS No. 141R,
“Business
Combinations,” which
replaces SFAS No. 141, “Business Combinations.” SFAS No. 141R establishes principles
and requirements for determining how an enterprise recognizes and measures thefair valueof certainassets and liabilitiesacquired in abusiness combination, including non-controlling interests,
contingent consideration and certain acquired contingencies. SFAS No. 141R also
requires acquisition-related transaction expenses and restructuring costs be
expensed as incurred rather than capitalized as a component of the business
combination. SFAS No. 141R is applicable prospectively to business combinations
for which the acquisition date was on or after the beginning of the first annual
reporting period beginning on or afterDecember 15, 2008. SFAS No. 141R would have an
impact on accounting for any businesses acquired after the effective date of
this pronouncement.




In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS
No. 157 establishes a single definition of fair value and a framework for
measuring fair value, sets out a fair value hierarchy to be used to classify the
source of information used in fair value measurements, and requires new
disclosures of assets and liabilities measured at fair value based on their
level in the hierarchy. This statement applies under other accounting
pronouncements that require or permit fair value measurements. In February 2008,
the FASB issued FSPs No. 157-1 and No. 157-2, which, respectively, remove
leasing transactions from the scope of SFAS No. 157 and defer its effective date
for one year relative to certain nonfinancial assets and liabilities. As a
result, the application of the definition of fair value and related disclosures
of SFAS No. 157 (as impacted by these two FSPs) was effective for us beginning
January 1, 2008 on a prospective basis with respect to fair value measurements
of (a) nonfinancial assets and liabilities that are recognized or disclosed at
fair value in our financial statements on a recurring basis (at least annually)
and (b) all financial assets and liabilities. This adoption did not have a
material impact on our consolidated results of operations or financial
condition. The remaining aspects of SFAS No. 157 for which the effective date
was deferred under FSP No. 157-2. Areas impacted by the deferral relate to
nonfinancial assets and liabilities that are measured at fair value, but are
recognized or disclosed at fair value on a nonrecurring basis. This deferral
applies to such items as nonfinancial assets and liabilities initially measured
at fair value in a business combination (but not measured at fair value in
subsequent periods) or nonfinancial long-lived asset groups measured at fair
value for an impairment assessment. The effects of these remaining aspects of
SFAS No. 157 are to be applied to fair value measurements prospectively
beginning January 1, 2009. The adoption of this pronouncement did not impact our
consolidated financial position and results of
operations.




21




ITEM 3. Quantitative and Qualitative
Disclosures About Market Risk





Not
required.





ITEM 4T.Controls and
Procedures


Disclosure
Controls and Procedures
 
 Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, carried out an evaluation of the effectiveness of our
“disclosure controls and procedures” (as defined in the Securities Exchange Act
of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the
period covered by this quarterly report on Form 10-Q (the “Evaluation Date”).
Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that, as of the Evaluation Date, our disclosure controls and
procedures are not effective to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act (i) is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission (“SEC”) rules and forms and (ii) is
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.
 
 Our
management, including our Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls and procedures or our internal
controls will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected.
 
 Internal
Control over Financial Reporting
 
 In
connection with the review of our consolidated financial statements for the
quarter ended June 30, 2009, our independent auditors identified certain
material weaknesses in our internal control over financial reporting. These
material weaknesses primarily relate to our lack of appropriate resources to
both manage the financial close process on a timely basis and handle the
accounting for the share exchange recapitalization transaction and other
transactions, which was due in part to the small size of our company prior to
our May 14, 2009 share exchange transaction.
 
 To ensure
the proper remediation of the above-mentioned material weaknesses, we intend to
hire additional staff as necessary to mitigate these weaknesses, as well as to
implement other planned improvements. Additional staff will enable us to
document and apply transactional and periodic controls procedures, permit a
better review and approval process and improve quality of financial
reporting.
 
 Changes
in Internal Control over Financial Reporting
 
 There
were no changes in our internal control over financial reporting that occurred
during our second quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.






22




PART II. OTHER
INFORMATION





ITEM 1. Legal
Proceedings





We are
not currently involved in any legal proceedings other than routine litigation
incidental to the business.





ITEM 1A. Risk Factors





Not
required.





ITEM 2. Unregistered Sales of Equity
Securities and Use of Proceeds





Unregistered Sales of Equity
Securities during the Three Months ended June 30, 2009





On May
14, 2009, at the closing of the share exchange transaction, we issued an
aggregate of 155,194,563 shares of our common stock to the former stockholders
of Hwareh.com (as previously reported in our current report on Form 8-K on May
15, 2009). The shares of our common stock issued to former holders of Hwareh.com
capital stock in connection with the share exchange transaction were exempt from
registration under Section 4(2) of the Securities Act of 1933 as a sale by an
issuer not involving a public offering or under Regulation D promulgated
pursuant to the Securities Act of 1933.  The common stock was not
registered under the Securities Act, or the securities laws of any state, and
was offered and sold in reliance on the exemption from registration afforded by
Section 4(2) and Regulation D (Rule 506) under the Securities Act and
corresponding provisions of state securities laws, which exempts transactions by
an issuer not involving any public offering.





On May
15, 2009, we granted stock options to purchase up to 8,436,000 shares of our
common stock under our 2009 Incentive Compensation Plan, with an exercise price
of $0.04 per share.





On May
20, 2009, we granted stock options to purchase up to 21,250,000 shares of our
common stock under our 2009 Incentive Compensation Plan, with exercise prices
ranging from $0.10 to $0.11 per share.





These stock option grants were made
without registrationin reliance on the exemption from registration
afforded by Section 4(2) and Regulation D (Rule 506) under the Securities Act
and corresponding provisions of state securities laws, which exempts
transactions by an issuer not involving any public offering.





On May
31, 2009, the holder of a Hwareh.com, Inc. warrant exercised that warrant, at an
exercise price of $0.0010778 per share, and received 927,833 shares of our
common stock. The issuance of
common stock upon exercise of the warrant was made without registrationin reliance on the exemption from registration afforded by Section 4(2)
and Regulation D (Rule 506) under the Securities Act and corresponding
provisions of state securities laws, which exempts transactions by an issuer not
involving any public offering.





On June
10, 2009, a former board of director member and holder of a warrant exercised
that entire warrant, at an exercise price of $0.05 per share, and received
125,000 shares of our common stock. In a separate transaction on the same day,
the same person exercised stock options to purchase 89,822 shares of common
stock at an average price of $0.0896 per share. The issuance of common stock upon
exercise of the warrant and stock options was made without registrationin reliance on the exemption from registration afforded by Section 4(2)
and Regulation D (Rule 506) under the Securities Act and corresponding
provisions of state securities laws, which exempts transactions by an issuer not
involving any public offering.





23





ITEM 3. Defaults upon
Senior Securities





None.





ITEM 4. Submission of
Matters to a Vote of Security Holders





On June
4, 2009, stockholders owning a majority of our outstanding shares of common
stock, the only classes of our voting securities outstanding as of the record
date, voted by written consent (a) to approve an amendment to our certificate of
incorporation to change our name to HealthWarehouse.com, Inc. and (b) to ratify
the adoption of our 2009 Incentive Compensation Plan. The stockholder consent
was signed by holders of 120,151,510 shares (or 63.8%) of the 188,250,724 shares
that were entitled to be voted on these matters.





ITEM 5. Other
Information





None.





ITEM 6.
Exhibits





The
following exhibits are filed as part of thisquarterly
report:




Exhibit Number and
Description





31.1
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act.





31.2
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act.





32.1
            Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act.





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








24





SIGNATURES




In accordance with Section 13 or 15(d)
of theSecuritiesExchange
Act of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




Dated:August 21,
2009




HEALTHWAREHOUSE.COM,
      INC.By:
            /s/ Lalit DhadphaleLalit
      DhadphalePresident
      and Chief Executive Officer
              (principal
      executive officer)By:
            /s/ Patrick E. DelaneyPatrick
      E. DelaneyChief
      Financial Officer and Treasurer
              (principal
      financial and accounting officer)





25




Exhibit
Index




Exhibit Number and
Description





31.1*
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act.





31.2*
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act.





32.1*
            Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act.





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







* filed herewith




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