**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  **FORM
        10-K/A**
 **AMENDMENT
        NO. 1**
  **x**
              **ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
  **For
        the fiscal year ended December 31, 2005**
  **OR**
  ** ̈**
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
  **Commission
        File No. 1-15445**
 
 **DRUGMAX,
        INC.**
 **(Name
        of registrant as specified in its charter)**
  **STATE
                  OF NEVADA**
              
              **34-1755390****(State
                  or other jurisdiction of**
                **incorporation
                  or organization)**
              
              **(IRS
                  Employer**
                **Identification
                  No.)****312
                  Farmington Avenue**
                **Farmington,
                  CT**
              
              **06032-1968****(Address
                  of Principal Executive Officers)**
              
              **(Zip
                  Code)**
  **Issuer’s
        telephone number: (860) 676-1222**
  **Securities
        registered pursuant to Section 12(b) of the Exchange Act:
        None.**
  **Securities
        registered pursuant to Section 12(g) of the Exchange Act:**
  **Common
        stock, Par value $.001 per share**
 **(Title
        of Class)**
  Indicate
        by check mark if the registrant is a well-known seasoned issuer, as defined
        in
        Rule 405 of the Securities Act.   Yes o  No  x
  Indicate
        by check mark if the registrant is not required to file reports pursuant
        to
        Section 13 or Section 15(d) of the Exchange Act.  Yes  o No  x
  Indicate
        by check mark whether the issuer (1) filed all reports required to be filed
        by
        Sections 13 or 15(d) of the Securities Exchange Act of 1934 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 if disclosure of delinquent filers pursuant to Item 405 of
        Regulation S-K is not contained herein, and will not be contained, to the
        best
        of registrant’s knowledge, in definitive proxy or information statements
        incorporated by reference in Part III of this Form 10-K or any amendment
        to this
        Form 10-K. x
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
        one):
  Large
        accelerated filer o   Accelerated
        filer o  Non-accelerated
        filer  x
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).  Yes o  No x
  The
        aggregate market value of the Common Stock, $.001 par value, held by
        non-affiliates of the Registrant based upon the last price at which the common
        stock was sold as of the last business day of the Registrant’s most recently
        completed second fiscal quarter, July 2, 2005, as reported on the NASDAQ
        Stock
        Market was approximately $31,266,865. Shares of Common Stock held by each
        officer and director and by each person who owns 5% or more of the outstanding
        Common Stock have been excluded in that such persons may be deemed to be
        affiliates. This determination of affiliate status is not necessarily a
        conclusive determination for other purposes.
  The
        number of shares outstanding of common stock as of March 31, 2006 was
        66,007,406.
  
  **EXPLANATORY
        NOTE**
  This
        Form
        10-K/A amends the Form 10-K annual report for the fiscal year ended December
        31,
        2005 filed by DrugMax, Inc. (the “Company” or “DrugMax”) on March 31, 2006. This
        Form 10-K/A is being filed solely to set forth the information required by
        Items
        10, 11, 12, 13, 14, and 15 and is Part III of Form 10-K because a definitive
        proxy statement containing such information will not be filed within 120
        days
        after the end of the fiscal year covered by the Company’s original Form 10-K
        filing. All other portions of the Company’s original Form 10-K filing remain in
        effect.
 
 **Item
        10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.**
  Set
        forth
        below is the business experience and other biographical information regarding
        the Company’s executive officers and directors as of April 15,
        2006:
 
 **Committee
                  Participation****Name**
              
              **Age**
              
              **Year
                  Appointed (1)**
              
              **Position**
              
              **Executive**
              **Compensation**
              **Nominating
                  and Governance**
              **Audit**Edgardo Mercadante
              
              50
              
              2004
              
              Chairman
                  of the Board, President and Chief Executive Officer
              
              CJames
                  E. Searson
              
              53
              
              2005
              
              Director,
                  Senior Vice President and Chief Operating OfficerDr.
                  Philip P. Gerbino
              
              59
              
              2004
              
              Director
              
              
              
              X
              XPeter
                  J. Grua
              
              51
              
              2004
              
              Director
              
              X
              C
              X
              XMark
                  T. Majeske
              
              48
              
              2004
              
              Director
              
              
              XDr.
                  Rakesh K. Sharma
              
              48
              
              2004
              
              Director
              
              
              XJugal
                  K. Taneja
              
              61
              
              2004
              
              DirectorLaura
                  L.Witt
              
              37
              
              2004
              
              Director
              
              X
              
              C
              CJames
                  A. Bologa
              
              42
              
              --
              
              Senior
                  Vice President and Chief Financial OfficerJames
                  S. Beaumariage
              
              46
              
              --
              
              Senior
                  Vice President Operations, Familymeds, Inc.Allison
                  D. Kiene
              
              39
              
              --
              
              Senior
                  Vice President, General Counsel and Secretary
  
 (X)
              Member
                  of Committee(C)
              Chairperson
                  of Committee(1)
              On
                November 12, 2004, DrugMax, Inc. and Familymeds Group, Inc. merged
                and a
                new Board of Directors was elected. Prior to the merger, Mr. Taneja
                served
                as the Company's Chairman of the Board.
  Pursuant
        to the Company’s bylaws, each director serves for a term of one (1) year or
        until his successor is duly qualified. Officers are appointed annually by
        the
        Board of Directors (subject to the terms of any employment agreement), to
        hold
        such office until an officer’s successor is duly appointed and qualified, unless
        an officer sooner dies, resigns or is removed by the Board. There are no
        family
        relationships among any of the Company’s directors and executive officers. There
        are no arrangements or understandings between directors and any other person
        concerning service as a director.
  **Information
        regarding Directors, Nominees and Executive Officers:**
 
 **Edgardo
        A. Mercadante** has
        served as the Company’s Chief Executive Officer and Chairman of the Board since
        the merger of DrugMax, Inc. with Familymeds Group, Inc. (“FMG”) on
        November 12, 2004 (the “Merger”). He served as FMG’s Chairman of the Board,
        Chief Executive Officer and President since 1997. Mr. Mercadante has over
        twenty-five years of experience in the prescription health care and managed
        care
        industries including significant experience in retail pharmacy.
        Mr. Mercadante was President of Arrow Corporation between the years of 1987
        to 1996. He was President and Chief Executive Officer of APP, a pharmacy
        benefit
        management company, which he co-founded in 1991. Mr. Mercadante served in
        management positions from 1980 to 1986 with Rite Aid Corporation.
        Mr. Mercadante is active in many national and state professional pharmacy
        organizations. Mr. Mercadante is a licensed pharmacist and holds a B.S. in
        Pharmacy from Philadelphia College of Pharmacy and Science. Mr. Mercadante
        holds directorships with General Nutrition Centers and ProHealth. He holds
        a
        Trusteeship with the University of Sciences in Philadelphia.
  1
 **James
        E. Searson** has
        served on the Company’s board of directors since February 24, 2005. Since
        April 13, 2006, he has served as the Company’s Chief Operating Officer. From
        May 23, 2005 to April 13, 2006, he served as the Company’s Chief Financial
        Officer. A certified public accountant, Mr. Searson worked at
        Ernst & Young from 1975 through 2004, most recently as an audit partner
        who managed the firm’s office in Hartford, CT. He also served in
        Ernst & Young’s offices in Chicago, IL; Zurich, Switzerland; Hamburg,
        Germany; and Munich, Germany. During his tenure at Ernst & Young,
        Mr. Searson provided audit, accounting, financial due diligence and
        reporting counsel and services to multinational manufacturing, distribution
        and
        service companies. Mr. Searson has a BSBA degree in accounting from John
        Carroll University, and also has completed the International Executive
        Management and Executive Management programs at Northwestern University.
        He is a
        member of the American Institute of Certified Public Accountants.
  **James
        A. Bologa**  joined
        the Company as Senior Vice President, Chief Financial Officer on April 13,
        2006.
        Prior to that, since 2004, Mr. Bologa served as Executive Vice President
        and
        Chief Financial Officer of Daticon, Inc., a privately held company, providing
        electronic document management conversion services. From 2001 to 2004, Mr.
        Bologa served as Vice President and Controller of TranSwitch Corporation
        (Nasdaq: TXCC), a communications semiconductor company. Prior to working
        for
        TranSwitch Corporation, beginning in 2000, Mr. Bologa served as Chief Financial
        Officer of Katerra Corporation, a privately held company developing internet
        gaming software. Mr. Bologa, a certified public accountant, began his career
        with PricewaterhouseCoopers LLP. Mr. Bologa has a B.S. in Accounting from
        Elmira
        College. He is a member of the New York State Society and the American Institute
        of Certified Public Accountants.
  **Allison
        D. Kiene** has
        served as the Company’s Senior Vice President, General Counsel and Secretary
        since November 12, 2004. Prior to that, since September 2002, she served
        in a
        similar capacity for FMG. Prior to joining FMG in September 2002, Ms. Kiene
        served as Regulatory Law Counsel for The Stop & Shop Supermarket
        Company headquartered in Quincy, MA from March 2000 until September 2002.
        Ms. Kiene previously served as a Pharmacy Manager for Stop & Shop
        Pharmacy from April 1994 until March 2000. Ms. Kiene is admitted to the Bar
        in Connecticut, Massachusetts, and New York. She also maintains her license
        to
        practice pharmacy in both Connecticut and New York. Ms. Kiene received her
        Bachelor of Science degree in Pharmacy from the University of Connecticut
        School
        of Pharmacy and her Juris Doctor degree from the University of Connecticut
        School of Law.
  **Dr.
        Philip P. Gerbino** has
        served on the Company’s board of directors since November 12, 2004.
        Previously, he served as a director of FMG since December 1996. Dr. Gerbino
        has been President of the University of the Sciences in Philadelphia and
        the
        Philadelphia College of Pharmacy since January 1995. Dr. Gerbino is also a
        past president of the American Pharmaceutical Association and is a well
        established consultant in the pharmaceutical and health care industry. He
        earned
        his PharmD. in 1970 from the Philadelphia College of Pharmacy and Science.
  **Peter
        J. Grua** has
        served on the Company’s board of directors since November 12, 2004.
        Previously, he served as a director of FMG. He also is a Managing Partner
        of HLM
        Venture Partners, where he has been employed since 1992. He has over 20 years
        of
        experience as an investor focused on the health care industry. Prior to joining
        HLM in 1992, Mr. Grua was a Managing Director and Senior Analyst at Alex
        Brown
        and Sons, where he led the firm’s health care services and managed care research
        efforts. Previously, he was a research analyst at William Blair &
Company and a strategy consultant at Booz Allen Hamilton. Mr. Grua is also
        a director of Health Care REIT, Renal Care Group, and two other private
        companies. Mr. Grua holds an AB degree from Bowdoin College and an MBA from
        Columbia University.
  **Mark
        T. Majeske** has
        served on the Company’s board of directors since November 12, 2004. From
        July 1996 to June 2000, Mr. Majeske served as Group President of McKesson
        HBOC/Pharmaceutical Group. Prior to becoming Group President, Mr. Majeske
        served
        as Executive Vice President Customer Operations and Regional Executive Vice
        President for McKesson. Since leaving McKesson in 2000, he has been a private
        investor and advisor to startup companies and most recently served as Chief
        Executive Officer of Day Runner, Inc., which was sold to MeadWestvaco
        Corporation in late 2003.
  **Dr.
        Rakesh K. Sharma** has
        served on the Company’s board of directors since November 12, 2004. He is
        an Interventional Cardiologist and is a member of the medical staff of several
        hospitals in the Tampa Bay area, where he has practiced for over ten years.
        Since August, 1999, he has been a partner and director of The Heart and Vascular
        Institute of Florida, LLC. Dr. Sharma also is Chief-of-Staff
        of Largo Medical Hospital, he serves on the board of trustees for Largo Medical
        Center and is the Director of Emergency Cardiac Services at Largo Medical
        Center. Since March, 1999, Dr. Sharma has served on the board of directors
        of
        Dynamic Health Products, Inc., a publicly traded company. He is a member
        of
        board of directors of the American Association of Cardiologist of Indian
        Origin
        and the International Society of Intravascular Ultrasound.
  2
 **Jugal
        K. Taneja** has
        served on the Company’s board of directors since the Company’s inception. From
        April 1996 until November 12, 2004, Mr. Taneja served as the Company’s
        Chief Executive Officer. In addition to his service to the Company,
        Mr. Taneja operates several other companies. He is presently the Chairman
        of the Board of Dynamic Health Products, Inc. (“Dynamic”), a position he has
        held since Dynamic’s inception in 1991. From November 1991 to June 1998, he
        served as Chief Executive Officer of Dynamic. Dynamic, a publicly traded
        company, is a distributor of proprietary and nonproprietary dietary supplements,
        over-the-counter drugs, and health and beauty care products. Mr. Taneja has
        served as the Chairman of the Board of GeoPharma, Inc., a publicly traded
        company that manufactures and distributes generic drugs, health and beauty
        aids,
        nutritional and health products, since June 1998. Mr. Taneja is the
        chairman of Bancequity Petroleum Corporation, a private company owns and
        operates 290 oil and gas wells. Mr. Taneja holds degrees in Petroleum
        Engineering, Mechanical Engineering, and a Masters in Business Administration
        from Rutgers University.
  **Laura
        L. Witt** has
        served on the board of directors since November 12, 2004. Previously, she
        served as a director of FMG. She is a General Partner of ABS Capital Partners,
        a
        private equity firm which she joined in 1997. Prior to joining ABS Capital
        Partners, Ms. Witt was a consultant with Monitor Company and with Oliver,
        Wyman & Company, both strategy consulting firms. Ms. Witt received
        a Bachelor of Arts from Princeton University and an M.B.A. from the Wharton
        School of Business, University of Pennsylvania. She currently serves as a
        director of Cyveillance, Inc., NSI Software, Inc., and of Rosetta Stone,
        Inc.
 
 **Code
        of Ethics**
  We
        have
        adopted a written code of ethics that applies to our principal executive
        officer, principal financial officer and principal accounting officer,
        responsive to Section 406 of the Sarbanes-Oxley Act of 2002 and the rules
        of the
        SEC. A copy of our code of ethics is posted and publicly available on our
        internet website at www.drugmax.com. This website address is intended to
        be an
        inactive, textual reference only; none of the material on this website is
        part
        of this report. If there are any amendments to or waivers, of the code of
        ethics, we intend to promptly disclose the nature of any such amendment or
        waiver on our website.
  **Audit
        Committee Information**
  DrugMax
        has a separately-designated standing audit committee established in accordance
        with section 3(a)(58)(A) of the Securities Exchange Act of 1934. Currently,
        DrugMax’s Audit Committee consists of Ms. Witt, Dr. Gerbino and Mr. Grua. Each
        of the members of the Audit Committee is independent pursuant to Rule
        4200(a)(15) of the National Association of Securities Dealers’ listing
        standards. DrugMax has determined that it has at least one audit committee
        financial expert serving on its audit committee, as that term is defined
        by Item
        401 of Regulation S-K. Currently, Ms. Witt serves as the audit committee’s
        financial expert. The Audit Committee operates under a written charter adopted
        by the Board of Directors, a copy of which has previously been filed with
        the
        SEC.
  **Compliance
        with Section 16(a) Beneficial Ownership Reporting
        Compliance**
  Section
        16(a) of the Securities Exchange Act of 1934 requires the Company’s executive
        officers and directors, and persons who beneficially own more than 10% of
        the
        Company’s common stock, to file reports of ownership and changes in ownership
        with the Securities and Exchange Commission. Executive officers, directors
        and
        greater than 10% beneficial owners are required by the Securities and Exchange
        Commission regulations to furnish the Company with copies of all Section
        16(a)
        forms they file.
  Based
        solely on the Company’s review of the copies of the forms furnished to it or
        written representations from the reporting persons that no reports were
        required, the Company believes that, during its fiscal year ended December
        31,
        2005, all of its executive officers, directors and greater than 10% beneficial
        owners complied with all applicable Section 16(a) filing
        requirements.
 
 **Compensation
        Committee Interlocks and Insider Participation**
 
 Dr.
        Rakesh K. Sharma and Messrs. Mark T. Majeske, and Peter J. Grua comprised
        the
        Compensation Committee for fiscal year ended December 31, 2005. No person
        who
        served as a member of the Compensation Committee was, during the past fiscal
        year, an officer or employee of the Company or any of its subsidiaries, was
        formerly an officer of the Company or any of its subsidiaries, or had any
        relationship requiring disclosure herein. No executive officer of the Company
        served as a member of the Compensation Committee of another entity, one of
        whose
        executive officers served as a director of the Company. Nor did any executive
        officer of the Company serve as a director of another entity, one of whose
        executive officers serve on the Compensation Committee of the Company.
  3
 
  **Item
            11. EXECUTIVE COMPENSATION**
  **Compensation
            to Outside Directors**
 Upon
        election to the Board of Directors, each outside Director, receives an award
        of
        restricted stock in the amount of $50,000. Such shares vest 1/3 upon the
        date of
        grant and 1/3 on the first and second anniversary thereafter. Further, on
        each
        year following his or her election to the Board, each outside Director shall
        receive an award of restricted stock in the amount of $25,000. The foregoing
        shares are granted under the Company’s 2003 Restricted Stock Plan. In addition,
        each outside Director shall be issued an option to purchase 10,000 shares
        of
        common stock annually each year following his or her election to the Board
        of
        Directors. Each outside Director who serves as a member of a committee shall
        be
        issued an option to purchase 5,000 shares of the Company’s common stock
        annually. The chairperson of each committee, other than the Audit Committee,
        shall be issued an option to purchase an additional 5,000 shares of common
        stock
        annually. The chairperson of the Audit Committee and the Chairman of the
        Board
        shall receive an option to purchase 10,000 shares of the Company’s common stock
        annually. The foregoing options are granted under the Company’s 1999 Stock
        Option Plan.
  All
        of
        the Company’s outside Directors receive $2,000 for each meeting of the Board of
        Directors that they attend, $5,000 per quarter and reimbursement of their
        reasonable out-of-pocket expenses incurred in connection with such meetings.
        In
        addition, each outside Director who serves on a committee receives $1,000
        for
        each meeting attended.
 
 **Compensation
        to Executive Officers**
  The
        following summary compensation table sets forth the cash and non-cash
        compensation paid during the past three fiscal years to (a) the individual
        serving as the Company’s Chief Executive Officer during the fiscal year ended
        December 31, 2005 and (b) the four most highly compensated executive
        officers of the Company, receiving compensation of at least $100,000, during
        the
        fiscal year ended December 31, 2005 (the “Named Executive Officers”):
  4
  
 **Annual
                  Compensation**
              
              **Long
                  Term Compensation****Name
                  and Principal Position**
              **Fiscal
                  Year Ended**
              **Salary**
              **Bonus**
              **Other**
                **Compensation
                  (1)**
              
              **Restricted
                  Stock Awards (2)**
              
              **#
                  of Securities Underlying Options**
              **All
                  Other Compensation (3)**Edgardo
                  A. Mercadante,
                Co-Chairman
                  of the Board
                and
                  Chief Executive Officer
              2005
              $346,466
              $
                  -
              $11,638
              
              $278,000
                  (4)
              
              425,000
              $15,6332004
              $340,157
              $30,000
              $
                  -
              
              $966,348(4)
              
              1,221,672
              $14,8232003
              $329,500
              $30,000
              $
                  -
              
              $
                  -(4)
              
              -
              $14,341Jugal
                  K. Taneja,
                Co-Chairman
                  of the Board
              2005
              $360,549
              $
                  -
              $12,600
              
              $23,739(4)
              
              35,000
              $10,0002004
              $207,692
              $40,000
              $24,100
              
              $
                  -(4)
              
              -
              $
                  -2003
              $197,439
              $18,500
              $23,850
              
              $
                  -(4)
              
              42,500
              $
                  -James
                  E. Searson,
                Senior
                  Vice President,
                Chief
                  Financial Officer
              2005
              $144,231(5)
              $25,000(5)
              $25,900
              
              $183,850(4)
              
              350,000
              $3,3852004
              $
                  -
              $
                  -
              $
                  -
              
              $
                  -
              
              -
              $
                  -2003
              $
                  -
              $
                  -
              $
                  -
              
              $
                  -
              
              -
              $
                  -Allison
                  D. Kiene,
                Senior
                  Vice President,
                General
                  Counsel & Secretary
              2005
              $166,346
              $
                  -
              $11,639
              
              $
                  -
              
              165,000
              $2552004
              $156,538
              $35,000
              $3,393
              
              $74,000(4)
              
              31,675
              $4,2142003
              $145,385
              $25,000
              $1,968
              
              $
                  -
              
              -
              $1,178James
                  S. Beaumariage,
                Senior
                  Vice President, Operations,
                Familymeds,
                  Inc.
              2005
              $191,889
              $
                  -
              $777
              
              $
                  -(4)
              
              125,000
              $5,1502004
              $188,395
              $20,000
              $
                  -
              
              $185,000(4)
              
              143,314
              $5,0502003
              $182,492
              $20,000
              $
                  -
              
              $
                  -(4)
              
              -
              $6,338
 
 
 (1)
              Represents
                  amounts relating to reimbursed pharmacy and medical expenses, club
                  dues
                  and auto allowances. For Mr. Taneja, amounts also include director
                  compensation for 2003 and 2004.(2)
              Represents
                  the value of restricted stock granted to the named executive officers
                  based upon the closing price of the Company’s common stock on the grant
                  date of their respective shares. The restricted stock was granted
                  under
                  the Company’s 2003 Restricted Stock Plan.(3)
              Represents
                  amounts contributed to defined benefit plans and premiums paid
                  on life
                  insurance.(4)
              Amounts
                  shown under Restricted Stock Awards represent the grant date values
                  of our
                  restricted stock awarded to the named executive officers. Each
                  named
                  executive officer held restricted stock at December 31, 2005, in
                  the
                  aggregate number of shares of our common stock and the aggregate
                  value at
                  that date, as follows: Mr. Edgardo A. Mercadante-461,175 shares,
                  $590,304;
                  Mr. Jugal K. Taneja-21,008 shares, $26,890; Mr. James E. Searson-115,000
                  shares, $147,200; Mrs. Allison D. Kiene-20,000 shares, $25,600;
                  and Mr.
                  James S. Beaumariage-50,000 shares, $64,000. As of December 31,
                  2005, all
                  restricted stock awards granted on November 12, 2004 are fully
                  vested. All
                  restricted stock awards granted on October 7, 2005 will vest 2/3 and 1/3
                  on October 7, 2006 and 2007, respectively. Holders of restricted
                  stock
                  have the same voting rights as other holders of our common stock,
                  however,
                  holders are not entitled to any dividends during the vesting period.
                  The
                  Company's closing stock price was $1.28 on December 30,
                  2005.(5)
              Represents
                  salary from May 23, 2005 through December 31, 2005. Additionally,
                  Mr.
                  Searson was paid a sign on bonus of $25,000. Mr. Searson’s annual base
                  salary is $250,000.
  5
  **OPTION
        GRANTS IN LAST FISCAL YEAR**
  The
        following table provides information as to options granted to each of the
        Named
        Executive Officers of the Company during fiscal year ended December 31, 2005.
        All such options were granted under the 1999 Stock Option Plan.
  **Name**
              
              **Number
                  of Securities Underlying Options Granted**
              
              **%
                  of Total Options Granted to Employees in Fiscal Year**
                **(1)**
              
              **Exercise
                  Price**
                **($
                  per Share)**
                **(2)**
              
              **Expiration
                  Date**
              
              **Potential
                  Realizable Value at**
                **Assumed
                  Annual Rates of**
                **Stock
                  Price Appreciation for**
                **Option
                  Term (3)**
                
                **5%     10%**Edgardo
                  A. Mercadante
              
              25,000
              
              2%
              
              $3.11
              
              1/19/2015
              
              $
                  50,525
              
              $126,507400,000
              
              25%
              
              $1.39
              
              10/7/2015
              
              $349,665
              
              $
                  886,121James
                  E. Searson
              
              150,000
              
              9%
              
              $2.80
              
              6/1/2015
              
              $283,682
              
              $700,497200,000
              
              12%
              
              $1.39
              
              10/7/2015
              
              $174,833
              
              $
                  443,060Jugal
                  K. Taneja
              
              25,000
              
              2%
              
              $3.11
              
              1/19/2015
              
              $50,525
              
              $126,50710,000
              
              1%
              
              $1.19
              
              12/12/2015
              
              $6,507
              
              $17,409James
                  S. Beaumariage
              
              125,000
              
              8%
              
              $1.20
              
              9/27/2015
              
              $116,731
              
              $
                  274,725Allison
                  D. Kiene
              
              40,000
              
              2%
              
              $2.80
              
              6/1/2015
              
              $75,649
              
              $186,799125,000
              
              8%
              
              $1.20
              
              9/27/2015
              
              $116,731
              
              $
                  274,725
 
 
 (1)
              Options
                  to purchase a total of 1,618,970 shares of common stock were granted
                  in
                  fiscal year ended December 31, 2005 to employees and directors
                  (including
                  the Named Executive Officers) under the Company’s 1999 Stock Option
                  Plan.(2)
              The
                  exercise price was the fair market value of a share of the Company’s
                  common stock at the time of grant as determined in accordance with
                  the
                  Company’s 1999 Stock Option Plan.(3)
              Potential
                  realizable value is based on the assumption that the common stock
                  appreciates at the annual rate shown (compounded annually) from
                  the due
                  date of grant until the expiration of the option term. Stock price
                  appreciation of 5% and 10% is based on the fair market value at
                  the time
                  of grant and assumes that the option is exercised at the exercise
                  price
                  and sold on the last day of its term at the appreciated price,
                  pursuant to
                  rules promulgated by the SEC. The potential realizable value does
                  not
                  represent the Company’s prediction of its stock price performance. This
                  table does not take into account any appreciation or depreciation
                  in the
                  fair value of the common stock from the date of grant to date.
                  There can
                  be no assurance that the actual stock price appreciation over the
                  option
                  term will be at the assumed 5% and 10% levels or at any other defined
                  level.
  6
 
 **AGGREGATED
        OPTIONS EXERCISED IN LAST FISCAL YEAR**
 **AND
        FISCAL YEAR END OPTION VALUES**
  The
        following table provides information as to options exercised by each of the
        Named Executive Officers of the Company during the fiscal year ended December
        31, 2005. The table sets forth the value of options held by such officers
        at
        year end measured in terms of the closing price of the Company’s Common Stock on
        December 31, 2005.
   **Number
                  of Securities Underlying Unexercised Options at Fiscal Year
                  End**
              
              **Value
                  of Unexercised In-The-Money Options at Fiscal Year
                  End****Name**
              
              **Shares
                  Acquired on Exercise**
              
              **Value
                  Realized**
              
              **Exercisable**
              **Unexercisable**
              
              **Exercisable**
              **Unexercisable**Edgardo
                  A. Mercadante
              
              -
              
              -
              
              25,000
              
              1,621,672
              $
              -
              $
              867,387James
                  E. Searson
              
              -
              
              -
              
              87,500
              
              262,500
              $
              -
              $
              -Jugal
                  K. Taneja
              
              -
              
              -
              
              252,500
              
              -
              $
              900
              $
              -James
                  S. Beaumariage
              
              -
              
              -
              
              -
              
              268,314
              $
              -
              $
              111,753Allison
                  D. Kiene
              
              -
              
              -
              
              13,334
              
              183,341
              $
              -
              $
              32,489
 
 **Equity
        Compensation Plan Information**
  The
        following table summarizes the Company’s equity compensation plan information as
        of December 31, 2005. Information is included for both equity compensation
        plans
        approved by the Company’s stockholders and equity compensation plans not
        approved by the stockholders.
  **Plan
                  Category**
              
              **Number of securities**
                **to
                  be issued upon**
                **exercise
                  of**
                **outstanding
                  options,**
                **warrants
                  and rights**
              
              **Weighted-average**
                **exercise price of**
                **outstanding options,**
                **warrants
                  and rights**
              
              **Number of securities**
                **remaining
                  available**
                **for
                  future issuance**
                **under
                  equity**
                **compensation
                  plans**
                **(excluding
                  securities**
                **reflected
                  in**
                **column (a)****(a)**
              
              **(b)**
              
              **(c)**Equity
                  compensation plan approved by securities holders (1)
              
              3,770,760
              
              $
              1.35
              
              2,229,240Equity
                  compensation plan not approved by security holders
              
              —
              
              
              —
              
              —Total
              
              3,770,760
              
              $
              1.35
              
              2,229,240
  
 1.
              Equity
                  compensation plans approved by stockholders include the 1999 Stock
                  Option
                  Plan and the 2003 Restricted Stock Plan. All shares to be issued
                  upon
                  exercise in column (a) and the weighted average exercise price in
                  column (b) represent shares to be issued upon the exercise of options
                  granted under the 1999 Stock Option Plan. 1,156,845 restricted
                  shares
                  granted under the 2003 Restricted Stock Plan have been excluded
                  from the
                  above table.
   7
 
  *Employment Agreements and Other Arrangements*
 **Edgardo
        A. Mercadante** —Mr.
        Mercadante serves as the Company’s Chairman of the Board, President and Chief
        Executive Officer. On March 31, 2006, the Company entered into a new employment
        agreement with Mr. Mercadante. The initial term of Mr. Mercadante’s
        agreement terminates on November 30, 2008, and is subject to successive,
        automatic one-year renewals, unless one party notifies the other of its desire
        not to renew the agreement. The agreement provides an initial salary of
        approximately $346,000, which represents no change from fiscal year ended
        December 31, 2005, and for bonuses as determined by the board of directors.
        For
        2006, the employment agreement requires, if the Company achieves the performance
        levels set by the board, that Mr. Mercadante receive a cash bonus equal to
        100% of his salary. Additionally, at the end of the first year of the
        initial term of the employment, the Company is required to issue to Mr.
        Mercadante stock options and restricted stock at fair market value and
        comparable in amounts to those issued to a chief executive officer and chairman
        of the board of directors of a comparable publicly traded corporation. The
        agreement also contains standard termination provisions for disability, for
        cause, and for good reason, and it also contains confidentiality and
        non-competition provisions that prohibit Mr. Mercadante from disclosing
        certain information belonging to the Company and from competing against the
        Company. If the employment agreement is terminated other than for cause prior
        to
        November 30, 2009, or if the Company fails to renew the agreement at least
        through November 30, 2009, the Company is required to continue to pay to
        Mr. Mercadante (or to his estate in the event of termination due to his
        death) two year’s severance equal to the amount of the compensation and other
        benefits, to which he was entitled at the time of termination, subject to
        the
        terms of the agreement.
  **Jugal
        K. Taneja—** Mr.
        Taneja currently serves as a director of the Company and from the date of
        the
        Merger until November 30, 2005 he served as the Company’s Co-Chairman of the
        Board. On June 7, 2005, as contemplated by the Merger, the Company entered
        into a new employment agreement with Mr. Taneja. The initial term of
        Mr. Taneja’s agreement terminated on November 30, 2005. The agreement
        had provided for an initial annual base salary of $346,466, plus bonuses
        as
        determined by the board of directors. The agreement contains confidentiality
        and
        non-competition provisions that prohibit Mr. Taneja from disclosing certain
        information belonging to the Company and from competing against the Company.
        The
        employment agreement was terminated on November 30, 2005. Therefore, the
        Company is required to continue to pay to Mr. Taneja (or to his estate in
        the event of termination due to his death) his compensation and other benefits
        until November 30, 2007, subject to the terms of the
        agreement.
 
 **James
        E. Searson** —Mr. Searson
        currently serves as the Company’s Senior Vice President and Chief Operating
        Officer. On June 7, 2005, the Company entered into a new employment
        agreement with Mr. Searson. The initial term of Mr. Searson’s
        agreement terminates on May 23, 2006, and is subject to successive,
        automatic one-year renewals, provided that either party may terminate the
        agreement at any time by providing 90-days prior written notice. The agreement
        provides for an initial annual base salary of $250,000, plus bonuses as
        determined by the board of directors of up to 45% of his annual base
        compensation. The agreement also contains standard termination provisions
        for
        disability, for cause, and for good reason, and it also contains confidentiality
        provisions that prohibit Mr. Searson from disclosing certain information
        belonging to the Company. If the Company terminates the employment agreement
        other than for cause, death or disability prior to May 23, 2006, the
        Company is required to pay to Mr. Searson an amount equal to the monthly
        portion of his annual base compensation multiplied by the greater of 12 months
        or the number of months remaining in the term of the agreement.
  **James
        A. Bologa -** Mr.
        Bologa serves as DrugMax’s Senior Vice President and Chief Financial Officer. On
        March 30, 2006, DrugMax, Inc. entered into an employment agreement with Mr.
        Bologa. The initial term of the agreement ends on April 12, 2009, provided
        that
        the agreement will renew automatically for successive one-year terms, except
        that after the initial term either party may terminate the agreement by
        providing the other party notice of termination 90 days prior to the proposed
        termination date. Pursuant to the agreement, Mr. Bologa will receive a base
        salary of $240,000. Additionally, Mr. Bologa will be entitled to participate,
        at
        the discretion of the board, in any incentive or bonus plan adopted by the
        compensation committee, based on performance goals set by the board from
        time to
        time. As a signing bonus, effective on the date his employment commences
        (April
        13, 2006), Mr. Bologa will receive an option to purchase up to 100,000 shares
        of
        DrugMax common stock at fair market value on April 13, 2006 and a grant of
        100,000 shares of DrugMax restricted common stock. Mr. Bologa’s employment
        agreement also contains standard termination provisions for disability, for
        cause, and for good reason, and it also contains non-compete and confidentiality
        provisions that prohibit him from disclosing certain information belonging
        to
        DrugMax.
 
 **James
        S. Beaumariage** —Mr.
        Beaumariage is the Senior Vice President of Operations for Familymeds, Inc.
        (a
        wholly-owned subsidiary). In May 1998, Familymeds, Inc. entered into an
        employment agreement with Mr. Beaumariage, which was amended August 8,
        2002 and August 13, 2004. The amended agreement provides for a two-year
        term and is subject to automatic one-year renewals. The agreement provides
        a
        minimum annual base salary of $191,889, plus bonuses and stock options as
        determined by the board of directors. Mr. Beaumariage’s employment
        agreement contains standard termination provisions for disability, for cause,
        and for good reason, and it also contains non-compete and confidentiality
        provisions that prohibit him from disclosing certain information belonging
        to
        the Company.
 
 **Allison
        D. Kiene** —Ms.
        Kiene serves as the Company’s Senior Vice President, General Counsel and
        Secretary. In September 2002, Familymeds Group, Inc. entered into an employment
        agreement with Ms. Kiene, which was amended on August 13, 2004. The amended
        agreement provides a two-year term and automatic one-year renewals. The
        agreement provides a minimum annual base salary of $165,000 plus bonuses
        as
        determined by the board of directors. Ms. Kiene’s employment agreement contains
        standard termination provisions for disability, for cause, and for good reason,
        and it also contains non-compete and confidentiality provisions that prohibit
        her from disclosing certain information belonging to the Company.
  8
  **Item
        12.**  **SECURITY
        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.**
  To
        the
        knowledge of the Company, the following table sets forth, as of March 31,
        2006,
        information as to the beneficial ownership of the Company’s voting securities by
        (i) each person known to the Company as having beneficial ownership of more
        than
        5% of the Company’s voting securities, (ii) each person serving the Company as a
        director on such date, (iii) each person serving the Company as an executive
        officer on such date who qualifies as a Named Executive Officer, as defined
        in
        Item 403(a)(3) of Regulation S-K under the Securities Exchange Act of 1934,
        and
        (iv) all of the directors and executive officers of the Company as a
        group.
 
 **Name
                and Address of Beneficial Owner(1)**
              
              
              **Amount
                          and**
                        **Nature
                          of**
                        **Beneficial**
                        **Ownership**
                        (2)
              
              
              **Percent**
                      **of**
                      **Class**MEDCAP
                  MANAGEMENT & RESEARCH LLC (3)500
                  Third Street, Suite 535,San
                  Francisco, CA 94107
              
              
              11,219,948
              
              
              17.00
              %C.
                  FRED TONEY (3)500
                  Third Street, Suite 535,San
                  Francisco, CA 94107
              
              
              11,219,948
              
              
              17.00
              %MEDCAP
                  PARTNERS, LP (3)500
                  Third Street, Suite 535,San
                  Francisco, CA 94107
              
              
              7,809,111
              
              
              11.83
              %MEDCAP
                  MASTER FUND, L.P. (3)MEDCAP
                  PARTNERS OFFSHORE, LTD. (3)
                c/o
                  ATC Trustees (Cayman) Limited, Cayside, 2nd Floor,
                Harbour
                  Drive,George
                  Town,
                Grand
                  Cayman, Cayman Islands.
              
              
              3,844,781
              
              
              5.79
              %AMERISOURCE
                  BERGEN DRUG CORPORTION (4)
                1300
                    Morris Drive,Chesterbrook,
                    PA
              
              
              3,914,708
              
              
              5.60
              %ABS
                  CAPITAL PARTNERS III, L.P. (5)
                400
                    East Pratt St Ste 910,Baltimore
                    MD 21202
              
              
              6,183,444
              
              
              9.15
              %JANUS CAPITAL MANAGEMENT LLC(6)
                151
                    Detroit Street,Denver
                    CO 80206
              
              
              7,202,898
              
              
              10.91
              %SF
                  CAPITAL PARTNERS LTD. (7)
                c/o Stark
                  Offshore Management LLC
                3600
                  South Lake Drive
                St.
                  Francis, WI 53235
              
              
              5,208,000
              
              
              7.74
              %THIRD
                  POINT, LLC. (8)
                390
                  Park Avenue, 18th floor
                New
                  York, New York 10022
              
              
              6,175,000
              
              
              9.06
              %TRUSTMAN
                  C/O STI CLASSIC SMALL CAP GROWTH FUND (9)
                c/o
                  Trusco Captial Management
                50
                  Hurt Plaza, Suite 1400
                Atlanta,
                  GA 30303
              
              
              3,904,500
              
              
              5.80
              %DELTA PARTNERS LLC
                One
                  International Place, Suite 2401
                Boston,
                  MA 02110 (10)
              
              
              3,777,000
              
              
              5.62
              %J. STEVEN EMERSON
                1522
                  Enslay Avenue
                Century
                  City, CA 90024 (11)
              
              
              4,858,700
              
              
              7.29
              %**Officers
                  and Directors**Edgardo
                  A. Mercadante (12)
              
              
              1,537,847
              
              
              2.29
              %James
                  E. Searson (13)
              
              
              183,000
              
              
              *James
                  S. Beaumariage (14)
              
              
              193,314
              
              
              *Allison
                  D. Kiene (15)
              
              
              65,009
              
              
              *Peter
                  J. Grua (16)
              
              
              1,658,870
              
              
              2.50
              %Dr.
                  Philip P. Gerbino (17)
              
              
              80,003
              
              
              *Mark
                  T. Majeske (18)
              
              
              57,003
              
              
              *Dr.
                  Rakesh K. Sharma (19)
              
              
              57,003
              
              
              *Jugal
                  K. Taneja (20)
              
              
              1,772,210
              
              
              2.67
              %Laura
                  L. Witt (21)
              
              
              6,278,447
              
              
              9.28
              %**All
                  Directors and Executive Officers as a group**
              
              
              11,882,706
              
              
              16.96
              %
 
 *
              Less
                  than 1% of the outstanding common
                  stock.
  9
 
 (1)
              Unless otherwise indicated, the address of each of the beneficial owners
              identified is 312 Farmington Avenue, Farmington, CT 06032-1968.
 
 (2)
              Based
              on 66,007,406 shares of common stock and no shares of preferred stock
              outstanding as of March 31, 2006 plus any vested warrants or options
              for each
              beneficial owner. Beneficial ownership is determined in accordance
              with the
              rules of the SEC and generally includes voting or investment power
              with respect
              to securities. Shares of vested restricted stock and of common stock
              subject to
              options currently exerciseable or exerciseable within 60 days of March
              31, 2006
              (“Presently Exercisable Securities”) are deemed outstanding for computing the
              percentage held by each person or entity listed, but are not deemed
              outstanding
              for computing the percentage of any other person or entity.
 
 (3)
              In
              calculating the beneficial ownership of this entity, the Company has
              relied upon
              the Schedule 13G, as amended, filed by this entity with the SEC on
              January 26,
              2006. Such amount does not include 3,904,556 warrants received in connection
              with the pr ivate
              investment in our stock which
              closed on October 3, 2005. Such
              warrants are subject to conversion caps that preclude the holder thereof
              from
              utilizing its exercise rights to the extent that it would beneficially
              own
              (determined in accordance with Section 13(d) of the Exchange Act) in
              excess of
              9.99% of the Common Stock, giving effect to such exercise. Medcap Management
              & Research LLC, as general partner and investment manager of MedCap Partners
              and MedCap Master Fund, and C. Fred Toney as managing member of Medcap
              Management & Research LLC, may be deemed to beneficially own the securities
              owned by MedCap Partners and MedCap Master Fund in that they may be
              deemed to
              have the power to direct the voting or disposition of the Securities.
              Medcap
              Management & Research LLC and C. Fred Toney disclaim beneficial ownership as
              to such securities, except to the extent of their respective pecuniary
              interests
              therein.
 
 (4)
              The
              Selling Shareholder has contractually agreed to restrict its ability
              to convert
              its debenture and receive shares of our common stock such that the
              number of
              shares of common
 stock
              held by it after such conversion or exercise does not exceed 9.99%.
 
 (5)
              In
              calculating the beneficial ownership of this entity, the Company has
              relied upon
              the
 Schedule
              13D, as amended, filed by this entity with the SEC on October 19, 2005
              and
              includes 1,561,791 warrants to purchase common stock. The
              shares are owned by ABS Capital Partners III, L.P. ABS Partners III,
              L.L.C., as
              the General Partner, and Donald B. Hebb, Jr, Timothy T. Weglicki and
              John D.
              Stobo, Jr, as the Managing Members of the General Partner are indirect
              beneficial owners of the reported securities. The General Partner and
              Managing
              Members disclaim beneficial ownership of theses shares except to the
              extent of
              their respective pecuniary interest therein. Laura
              Witt, a director of DrugMax, is a manager of the general partner of
              ABS Capital
              Partners III, L.P. Ms. Witt disclaims beneficial ownership of all such
              securities held by ABS Capital Partners III, L.P., except to the extent
              of her
              proportionate pecuniary interests therein.
 
 (6)
              Janus
              Capital has an indirect 82.5% ownership stake in Enhanced Investment
              Technologies LLC ("INTECH") and an indirect 30% ownership stake in
              Perkins,
              Wolf, McDonnell and Company, LLC ("Perkins Wolf").  Due to the above
              ownership structure, holdings for Janus Capital, Perkins Wolf and INTECH
              are
              aggregated for purposes of this filing. Janus Capital, Perkins Wolf
              and INTECH
              are registered investment advisers, each furnishing investment advice
              to various
              investment companies registered under Section 8 of the Investment Company
              Act of
              1940 and to individual and institutional clients (collectively referred
              to
              herein as "Managed Portfolios"). As a result of its role as investment
              adviser
              or sub-adviser to the Managed Portfolios, Janus Capital may be deemed
              to be the
              beneficial owner of 7,202,898 shares of the shares outstanding of Drugmax
              Common
              Stock held by such Managed Portfolios.  However, Janus Capital does not
              have the right to receive any dividends from, or the proceeds from
              the sale of,
              the securities held in the Managed Portfolios and disclaims any ownership
              associated with such rights. Janus Venture Fund is an investment company
              registered under the Investment Company Act of 1940 and is one of the
              Managed
              Portfolios to which Janus Capital provides investment advice. In calculating
              the
              beneficial ownership of this entity, the Company has relied upon the
              Schedule
              13G, as amended, filed by this entity with the SEC on February 13,
              2006. Such
              amount does not include 3,050,000 warrants received in connection with the
              private investment in our stock which closed on October 3, 2005. Such
              warrants
              are subject to conversion caps that preclude the holder thereof from
              utilizing
              its exercise rights to the extent that it would beneficially own (determined
              in
              accordance with Section 13(d) of the Exchange Act) in excess of 9.99%
              of the
              Common Stock, giving effect to such exercise.
 
 (7)
              Michael A. Roth and Brian J. Stark may be deemed to be the control
              persons of
              the shares owned by such entity. In calculating the beneficial ownership
              of this
              entity, the
 Corporation
              has relied upon the Schedule 13G, filed by this entity with the SEC
              on October
              4, 2005. Such amount includes 1,302,000 warrants received in connection
              with the
              pr ivate
              investment in our stock which
              closed on October 3, 2005. Such
              warrants are subject to conversion caps that preclude the holder thereof
              from
              utilizing its exercise rights to the extent that it would beneficially
              own
              (determined in accordance with Section 13(d) of the Exchange Act) in
              excess of
              9.99% of the Common Stock, giving effect to such exercise.
 
 (8)
              Third
              Point LLC (f/k/a Third Point Management Company L.L.C.), a Delaware
              limited
              liability company (the "Management Company"), serves as investment
              manager or
              adviser to a variety of hedge funds and managed accounts. Mr. Daniel
              S. Loeb,
              who is the Chief Executive Officer of the Management Company may be
              deemed to be
              the control person of the shares beneficially owned. In calculating
              the
              beneficial ownership of this entity, the Company has relied upon the
              Schedule
              13G, as amended, filed by this entity
              with the SEC on February 13, 2006. Such amount includes 2,175,000 warrants
              received in connection with the pr ivate
              investment in our stock which
              closed on October 3, 2005. Such
              warrants are subject to conversion caps that preclude the holder thereof
              from
              utilizing its exercise rights to the extent that it would beneficially
              own
              (determined in accordance with Section 13(d) of the Exchange Act) in
              excess of
              9.99% of the Common Stock, giving effect to such exercise.
 
 (9)
              The
              Company believes Mark Garfinkel may be deemed to be the control person
              for the
              shares owned by such entity. Such amount includes 1,301,500 warrants
              received in
              connection with the pr ivate
              investment in our stock which
              closed on October 3, 2005. Such
              warrants are subject to conversion caps that preclude the holder thereof
              from
              utilizing its exercise rights to the extent that it would beneficially
              own
              (determined in accordance with Section 13(d) of the Exchange Act) in
              excess of
              9.99% of the Common Stock, giving effect to such exercise.
 
 (10)
              Shares reported for Delta Partners, LLC and Charles Jobson include
              shares
              beneficially owned by Prism Partners L.P., Prism Offshore Fund Limited,
              and
              Prism Partners QP, LP.
 Shares
              reported for Charles Jobson also include shares beneficially owned
              by Tetra
              Capital Partners, LP and Tetra Offshore fund Limited. In calculating
              the
              beneficial ownership of
 this
              entity, the Company has relied upon the Schedule 13G, as amended, filed
              by this
              entity with the SEC on February 13, 2006. Such amount includes 1,250,000
              warrants received in connection with the pr ivate
              investment in our stock which
              closed on October 3, 2005. Such
              warrants are subject to conversion caps that preclude the holder thereof
              from
              utilizing its exercise rights to the extent that it would beneficially
              own
              (determined in accordance with Section 13(d) of the Exchange Act) in
              excess of
              9.99% of the Common Stock, giving effect to such exercise.
 
 (11)
              J.
              Steven Emerson may be deemed to be the control person of shares held
              by Emerson
              Partners, and Emerson Family Foundation. In calculating the beneficial
              ownership
              of this
 entity,
              the Company has relied upon the Schedule 13G filed by this entity with
              the SEC
              on January 26, 2006. Such amount includes 651,000 warrants received
              in
              connection with the pr ivate
              investment in our stock which
              closed on October 3, 2005. Such
              warrants are subject to conversion caps that preclude the holder thereof
              from
              utilizing its exercise rights to the extent that it would beneficially
              own
              (determined in accordance with Section 13(d) of the Exchange Act) in
              excess of
              9.99% of the Common Stock, giving effect to such exercise.
 
 (12)
              Edgardo A. Mercadante serves as our President, Chief Executive Officer
              and
              Chairman of the Board and owns 291,175 shares and 1,246,672 shares
              issuable upon
              exercise of
 Presently
              Exercisable Securities.
 
 (13)
              James E. Searson serves as our Senior Vice President, Chief Operating
              Officer
              and Director and owns 28,000 shares and 155,000 shares issuable upon
              exercise of
              Presently
 Exercisable
              Securities.
 
 (14)
              James S. Beaumariage serves as our Senior Vice President, Operations,
              Familymeds, Inc. and owns 50,000 shares and 143,314 shares issuable
              upon
              exercise of Presently Exercisable
 Securities.
 
 (15)
              Allison D. Kiene serves as our Senior Vice President, General Counsel
              and
              Secretary owns 20,000 shares and 45,009 shares issuable upon exercise
              of
              Presently Exercisable
 Securities.
 
 (16)
              Peter J. Grua, director of DrugMax, Inc. and owns shares and 15,003
              shares and
              70,252 shares issuable upon exercise of Presently Exercisable Securities. As
              an
              officer of HLM Management, Mr. Grua may be deemed to beneficially own
              an
              additional 1,573,615 shares of Common Stock He
              disclaims beneficial ownership of all such securities held by all such
              entities,
              except to the extent of his proportionate pecuniary interests therein.
              For
              Validus L.P. includes 203,622 warrants to purchase common stock. For
              HLM/CB
              Fund, L.P., includes 81,712 warrants to purchase common stock. For
              HLM/UH Fund,
              L.P., includes 112,123 warrants to purchase common stock.
 
 (17)
              Dr.
              Philip P. Gerbino, director of DrugMax, Inc. and owns 30,003 shares and
              50,000 shares issuable upon exercise of Presently Exercisable
              Securities.
 
 (18)
              Mark
              T. Majeske, serves as a director of DrugMax, Inc. and owns 12,003 shares
              and
              45,000 shares issuable upon exercise of Presently Exercisable
              Securities.
 
 (19)
              Rakesh K. Sharma, serves as a director of DrugMax, Inc. and owns 12,003
              shares
              and 45,000 shares issuable upon exercise of Presently Exercisable
              Securities.
 
 (20)
              Jugal K. Taneja serves as a Director of DrugMax, Inc. Includes the
              following
              shares and warrants beneficially owned: 21st Century Healthcare Fund
              LLC,
              300,000; Carnegie Capital,
 422,555;
              Dynamic Health Products, 122,462; First Delhi Trust, 48,378; and Manju
              Taneja,
              his spouse, 469,510. Mr. Taneja disclaims beneficial ownership of all
              such
              securities held by his wife. Mr. Taneja owns 1,519,710 shares and 252,500
              shares
              issuable upon exercise of Presently Exercisable Securities.
 
 (21) In
              calculating the beneficial ownership of this entity, the Company has
              relied upon
              the
 Schedule
              13D, as amended, filed by this entity with the SEC on October 19, 2005
              and
              includes 1,561,791 warrants to purchase common stock. The
              shares are owned by ABS Capital Partners III, L.P. ABS Partners III,
              L.L.C., as
              the General Partner, and Donald B. Hebb, Jr, Timothy T. Weglicki and
              John D.
              Stobo, Jr, as the Managing Members of the General Partner are indirect
              beneficial owners of the reported securities. The General Partner and
              Managing
              Members disclaim beneficial ownership of theses shares except to the
              extent of
              their respective pecuniary interest therein. Laura
              Witt, a director of DrugMax, is a manager of the general partner of
              ABS Capital
              Partners III, L.P. Ms. Witt disclaims beneficial ownership of all such
              securities held by ABS Capital Partners III, L.P., except to the extent
              of her
              proportionate pecuniary interests therein. Ms. Witt owns 25,003 shares
              and
              70,000 shares issuable upon exercise of Presently Exercisable
              Securities.
 Shares
        of
        the common stock of the Company are listed and traded on the Nasdaq Small
        Cap
        Market (“Nasdaq”) under the
        symbol “DMAX.”
  10
  **Item
        13.**  **CERTAIN
        RELATIONSHIPS AND RELATED TRANSACTIONS.**
  The
        Company’s drug distribution operations operated out of two locations, one in New
        Castle, Pennsylvania and one in St. Rose, Louisiana. The Pennsylvania facility
        is located at 209 Green Ridge Road, New Castle, Pennsylvania 16105. The Company
        leases this premises from Becan Development LLC, a related party owned, in
        part,
        by one of the Company’s directors. This facility consists of approximately
        45,000 square feet of office, warehouse, shipping and distribution space.
        The
        property was initially leased pursuant to a lease with a base term of 15
        years
        expiring December 30, 2018, with a monthly lease payment of $17,000. In
        connection with the sale of select assets from Valley Drug Company located
        in
        New Castle, Pennsylvania to Rochester Drug Cooperative (“RDC”) on December 27,
        2005, the lease was amended. The amendment provides that the term of the
        lease
        be 5 years, commencing December 21, 2005, with 2 additional 5-year options
        for
        renewal, and provides an option to purchase the premises from the landlord.
        RDC has agreed to enter into a lease assignment and assumption agreement
        for the
        amended New Castle lease contingent upon the Company and the landlord securing
        consents from the Pennsylvania Industrial Development Authority (“PIDA”) to such
        assignment. Until such time as the consents are obtained, the parties have
        agreed to operate under a sublease agreement.
 
 The
        Company also leases its Louisiana facility, which is located at 10016 River
        Road, St. Rose, Louisiana, 70087, from River Road Real Estate LLC, a related
        party owned, in part, by one of the Company’s directors. The building consists
        of approximately 39,000 square feet of air-conditioned office and warehouse
        space. The lease for the St. Rose location is for a term of five years expiring
        October 2006 and carries a monthly lease payment of $15,000.
 
 **Item
        14.**  **PRINCIPAL
        ACCOUNTING FEES AND SERVICES**
  *Audit
        and Related Fees*
  The
        following tables set forth the aggregate fees billed by Deloitte & Touche
        LLP for the services indicated for the years ended December 31, 2005 and
        January
        1, 2005.
 **2005**
                
                
                **2004**Audit
                
                $
                808,260
                
                $
                365,087Audit
                    Related
                
                
                14,563
                
                
                551,066Total
                
                $
                822,823
                
                $
                916,153
  **Audit
        Fees.**Audit
        fees were for professional services rendered in connection with the audit
        of the
        Company’s annual financial statements for the fiscal years ended December 31,
        2005 and January 1, 2005 and for the reviews of the financial statements
        included in the Company’s Quarterly Reports on Form 10-Q.
 
 **Audit
        Related Fees** . 
        Audit related fees for the fiscal year ended December 31, 2005 consist of
        fees
        for services provided in connection with the audit of the Company’s benefit
        plan. Audit related fees for the fiscal year ended January 1, 2005 include
        fees
        primarily for merger and due diligence work.
 
 DrugMax’s
        audit committee pre-approves all non-audit services provided to DrugMax by
        its
        independent accountants. According to its revised audit committee charter,
        a
        copy of which was previously filed with the SEC, this pre-approval authority
        may
        be delegated to a single member of the audit committee and then reviewed
        by the
        entire audit committee at the committee’s next meeting. Approvals of non-audit
        services will be publicly disclosed in DrugMax’s periodic reports filed with the
        SEC. For the fiscal year 2005, all non-audit services were pre-approved by
        the
        audit committee. The audit committee determined the rendering of the “audit
        related” work, listed above, by Deloitte & Touche LLP is compatible with
        maintaining the auditor’s independence.
  **PART
        IV**
 
 **Item
        15.**  **EXHIBITS**
 
 10.1
              
              Employment
                  Agreement, as amended by and between Familymeds, Inc. and Allison
                  D.
                  Kiene, effective as of September 9,
                  2002.*
 
 *
              Filed
                  herewith.
  11
  **SIGNATURES**
  Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of
        1934, the registrant has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto duly authorized.
  **DRUGMAX,
                  INC.**Date: May
                1,
                2006
              By:
              /s/ Edgardo
                A. MercadanteEdgardo
                A. MercadanteChairman
                of the Board, President and Chief Executive
                Officer
 
  Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been
        signed below by the following persons on behalf of the registrant in the
        capacities and on the dates indicated.
  **Signatures**
              
              **Title**
              
              **Date***/s/
                  Edgardo A. Mercadante*
              
              Chairman
                  of the Board, President, Chief Executive Officer and
                  Director
              
              May
                  1, 2006Edgardo
                  A. Mercadante*/s/
                  James E. Searson*
              
              Senior
                  Vice President, Chief Operating Officer, and Director
              
              May
                  1, 2006James
                  E. Searson*/s/
                  James A. Bologa*
              
              Senior
                  Vice President, Chief Financial Officer
              
              May
                  1, 2006James
                  A. Bologa*/s/
                  Philip P. Gerbino*
              
              Director
              
              May
                  1, 2006Philip
                  P. Gerbino*/s/
                  Peter J. Grua*
              
              Director
              
              May
                  1, 2006Peter
                  J. Grua*/s/
                  Mark T. Majeske*
              
              Director
              
              May
                  1, 2006Mark
                  T. Majeske*/s/
                  Rakesh K. Sharma*
              
              Director
              
              May
                  1, 2006Rakesh
                  K. Sharma*/s/
                  Jugal K. Taneja*
              
              Director
              
              May
                  1, 2006Jugal
                  K. Taneja*/s/
                  Laura L. Witt*
              
              Director
              
              May
                  1, 2006Laura
                  L. Witt
  12