10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2012

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________  to____________

Commission file number 0-7473

Amexdrug Corporation
(Exact name of registrant as specified in its charter)
NEVADA	95-2251025
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer identification No.)
7251 Condor Street
Commerce, California 90040
(Address of principal executive offices) (Zip code)
Registrant's telephone number: (323) 725-3100

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

Yes [X] No [ ]

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 [X]  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.

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer   [  ] (Do not check if a smaller reporting company)	Smaller reporting company [ X ]

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of August 6, 2012, there were 8,470,481 shares of the issuer’s common stock issued and outstanding, including 14,672 shares held as treasury shares.

AMEXDRUG CORPORATION

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

	Page
Item 1.   Financial Statements (Unaudited)	3
Consolidated Balance Sheets — As of June 30, 2012 (Unaudited) and December 31, 2011 (Audited)	5
Consolidated Statements of Operations for the Three and Six Months  Ended June 30, 2012 and 2011 (Unaudited)	6
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011 (Unaudited)	7
Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.   Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.   Controls and Procedures	15
PART II – OTHER INFORMATION
Item 1.   Legal Proceedings	15
Item 1A. Risk Factors	15
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.   Defaults Upon Senior Securities	16
Item 4.   Mine Safety Disclosures	16
Item 5.   Other Information	16
Item 6.   Exhibits	16

2

PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements.

The consolidated balance sheets of Amexdrug Corporation, a Nevada corporation, and subsidiaries as of June 30, 2012 (unaudited) and December 31, 2011 (audited), the related unaudited consolidated statements of operations for the three and six month periods ended June 30, 2012 and June 30, 2011, the related unaudited consolidated statements of cash flows for the six month periods ended June 30, 2012 and June 30, 2011, and the notes to the unaudited consolidated financial statements follow.  The consolidated financial statements have been prepared by Amexdrug’s management, and are condensed; therefore they do not include all information and notes to the financial statements necessary for a complete presentation of the financial position, results of operations and cash flows, in conformity with accounting principles generally accepted in the United States of America, and should be read in conjunction with the annual consolidated financial statements included in Amexdrug’s annual report on Form 10-K for the year ended December 31, 2011.

The accompanying consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the results of operations and financial position of Amexdrug Corporation consolidated with BioRx Pharmaceuticals, Inc., Allied Med, Inc., and Dermagen, Inc., its wholly owned subsidiaries, and all such adjustments are of a normal recurring nature.  The names “Amexdrug”, “we”, “our” and “us” used in this report refer to Amexdrug Corporation.

Operating results for the quarter ended June 30, 2012, are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.

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AMEXDRUG CORPORATION AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

	Page
Consolidated Balance Sheets – June 30, 2012 (Unaudited) and December 31, 2011 (Audited)	5
Consolidated Statements of Operations (Unaudited) for the Three and  Six Months Ended June 30, 2012 and 2011	6
Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2012 and 2011	7
Notes to Consolidated Financial Statements	8

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AMEXDRUG CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30, 2012			December 31, 2011
	(Unaudited)
Assets
Current Assets
Cash	$	103,381		$	589,472
Investment		4,257			2,112
Accounts receivable, net of allowance of $21,561 and 37,000, respectively		600,144			653,949
Prepaid expenses		40,205			45,513
Inventory		545,753			198,176
Deferred tax asset		7,200			12,600
Total Current Assets		1,300,940			1,501,822
Property and Equipment, at cost
Office and computer equipment		239,752			239,752
Leasehold improvements		15,700			15,700
		255,452			255,452
Less accumulated depreciation		(210,469	)		(205,562	)
Net Property and Equipment		44,983			49,890
Other Assets
Other deposits		28,212			28,212
Intangibles
Customer base, net of accumulated amortization of $18,259		-			-
Trademark, net of accumulated amortization of $920 and $837, respectively		730			813
Goodwill		17,765			17,765
Total Other Assets		46,707			46,790
Total Assets	$	1,392,630		$	1,598,502
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable	$	438,175		$	463,098
Accrued liabilities		26,722			31,098
Deferred operating lease liability		15,186			14,132
Corporate tax payable		61,677			-
Notes payable related parties		108,023			109,694
Business lines and short term promissory note		248,813			631,903
Total Current Liabilities		898,596			1,249,925
Shareholders' Equity
Common stock, $0.001 par value; 50,000,000 authorized common shares 8,470,481 shares issued and outstanding		8,471			8,471
Additional paid in capital		83,345			83,345
Treasury stock		(14,933	)		(13,972	)
Retained earnings		417,151			270,733
Total Shareholders' Equity		494,034			348,577
Total Liabilities and Shareholders' Equity	$	1,392,630		$	1,598,502

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

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AMEXDRUG CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Sales	$	2,314,704		$	3,621,079		$	4,495,693		$	6,461,797
Cost of Goods Sold		2,058,776			3,299,702			3,879,127			5,709,115
Gross Profit		255,928			321,377			616,566			752,682
Operating Expenses
Selling, general and administrative expense		192,910			191,006			381,683			341,639
Total Operating Expenses		192,910			191,006			381,683			341,639
Income  before depreciation expense		63,018			130,371			234,883			411,043
Depreciation and amortization expense		2,518			1,215			4,989			2,171
Income before Other Income/(Expenses)		60,500			129,156			229,894			408,872
Other Income/(Expenses)
Interest and other income		1			3			3			3
Penalty		-			(3,877	)		-			(4,098	)
Unrealized gain/(loss)		(1,286	)		(418	)		130			(892	)
Interest expense		(5,851	)		(7,642	)		(11,224	)		(14,068	)
Total Other Income/(Expenses)		(7,136	)		(11,934	)		(11,091	)		(19,055	)
Income before Provision for Income Taxes		53,364			117,222			218,803			389,817
Income tax expense		(11,033	)		(45,673	)		(72,385	)		(154,153	)
Net Income	$	42,331		$	71,549		$	146,418		$	235,664
BASIC AND DILUTED INCOME PER SHARE	$	0.00		$	0.01		$	0.02		$	0.03
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC AND DILUTED		8,470,481			8,470,481			8,470,481			8,470,481

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

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AMEXDRUG CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	June 30, 2012			June 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	146,418		$	235,664
Adjustment to reconcile net income to net cash used in operating activities
Depreciation and amortization		4,989			2,171
Unrealized (gain)/ loss on investment		(130	)		892
Change in Assets and Liabilities
(Increase) Decrease in:
Accounts receivable		53,805			(423,537	)
Inventory		(347,577	)		(35,217	)
Prepaid expenses		5,308			8,079
Deferred tax asset		5,400			8,053
Other assets		-			(13,750	)
Increase (Decrease) in:
Accounts payable and accrued liabilities		(29,298	)		(31,999	)
Deferred operating lease liability		1,054			9,778
Corporate income tax payable		61,677			(6,180	)
NET CASH USED IN OPERATING ACTIVITIES		(98,354	)		(246,046	)
Net CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of investments		-			-
Proceeds from the sale of investment		(2,015	)		1,104
Purchase of fixed assets		-			(11,291	)
NET CASH USED IN INVESTING ACTIVITIES		(2,015	)		(10,187	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances to officer		(1,671	)		(7,702	)
Purchase of treasury stock		(961	)		(1,104	)
Proceeds from credit line		(383,090	)		(27,505	)
NET CASH USED IN FINANCING ACTIVITIES		(385,722	)		(36,311	)
NET DECREASE IN CASH		(486,091	)		(292,544	)
CASH, BEGINNING OF PERIOD		589,472			443,703
CASH, END OF PERIOD	$	103,381		$	151,159
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	5,840		$	9,747
Income taxes	$	-		$	43,977

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

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AMEXDRUG CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS-UNAUDITED

JUNE 30, 2012

1.      Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.  For further information refer to the financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2011.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Amexdrug Corporation is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Income per Share Calculations

Income per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted income per share is the same as the basic income per share for the six months ended June 30, 2012, because there are no outstanding dilutive instruments.

3.     CAPITAL STOCK

During the six months ended June 30, 2012, the Company issued no shares of common stock.

4.     INCOME TAXES

The Company files income tax returns in the U.S. Federal jurisdiction, and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2009.

The Company accounts for uncertainty in tax positions by recognition in the financial statements.

The Company's policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

5.     BUSINESS SEGMENT INFORMATION

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

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5.     BUSINESS SEGMENT INFORMATION (Continued)

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

			Health and
			Beauty
	Distributions		Products		Total
For the period ended June 30, 2012
Sales to external customers	$	3,623,318	$	872,375	$	4,495,693
Depreciation and amortization		1,694		3,295		4,989
Segment income (loss) before taxes		69,946		148,857		218,803
Segment assets		652,058		740,572		1,392,630
For the period ended June 30, 2011
Sales to external customers	$	5,712,283	$	749,514	$	6,461,797
Depreciation and amortization		1,617		554		2,171
Segment income (loss) before taxes		314,093		75,724		389,817
Segment assets		959,010		563,987		1,522,997

6.     SUBSEQUENT EVENT

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has determined there are no subsequent events to be reported.

7.     COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company's principal executive offices and its warehouse and distribution operations moved to 7251 Condor Street, Commerce California in March 2011. The Company leases 27,500 square feet at a rental rate of $7,700 per month. The rental amount is scheduled to increase to $8,800 per month effective March 1, 2013.

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

Overview

Amexdrug Corporation is located at 7251 Condor Street, Commerce, California 90040.  Its phone number is (323) 725-3100.  Its fax number is (323) 725-3133. Its website is www.amexdrug.com.  Shares of Amexdrug common stock are traded on the OTC Bulletin Board under the symbol AXRX.OB.  The President of Amexdrug has had experience working in the pharmaceutical industry for the past 30 years.

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

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

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

Our team of professionals fully pledges the effectiveness of our distinct products.

At this time, we have certain distribution channels with suppliers and customers whom we know and trust, such as Amazon, and hundreds of independent pharmacies. Of the estimated 100,000 retailers (drug stores and food mass), our goal is to have 20,000 stores carry our products in 2012.

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

Amexdrug currently has 50,000,000 shares of authorized common stock $.001 par value, of which 8,470,481 are issued and outstanding as of June 30, 2012, including 14,672 shares held as treasury shares..

BioRx Pharmaceuticals

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

A total of fourteen innovative health and wellness products have been for sale by BioRx Pharmaceuticals, Inc. These over-the-counter and natural products are effective for treatment of fungus, arthritis, sunburn protection and for healthy feet and nails. BioRx Pharmaceuticals is planning to sell these products to national chain drugstores, sport chain stores, natural food markets and other mass markets. These products are being marketed under the name of Sponix, and are being sold under the name of BioRx Pharmaceuticals.

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Allied Med, Inc.

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

Allied Med, Inc., was formed as an Oregon corporation in October 1997 to operate in the pharmaceutical wholesale business of selling a full line of brand name and generic pharmaceutical products, over-the-counter (OTC) drug and non-drug products and health and beauty products to independent and chain pharmacies, alternative care facilities and other wholesalers. At Allied Med our sincere interest is our customers' needs. Our competitive discount pricing allows our customers an advantage.

Amexdrug assumed the operations of Allied Med, and Amexdrug has been building on the wholesale pharmaceutical operations of Allied Med.

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

Dermagen, Inc.

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

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

Royal Health Care Company

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

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

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

Lease Agreements and Certain Other Contracts

The Company's principal executive offices and its warehouse and distribution operations moved to 7251 Condor Street, Commerce California in March 2011.  The Company leases 27,500 square feet at a rental rate of $7,700 per month.  The rental amount is scheduled to increase to $8,800 per month effective March 1, 2013.  Approximately 2,500 square feet of the premises is used for executive offices, and the balance of the premises is used for warehouse and distribution operations.  The lease is for a period of three years which commenced on March 1, 2011 and terminates on February 28, 2014.  The Company has the option to extend the lease for two additional three year periods.  If the Company exercises the first option to extend, the rental rate would increase to $9,900 per month effective March 1, 2014, $11,000 per month effective March 1, 2015 and $11,550 per month effective March 1, 2016. If the Company exercises the second option to extend, the rental rate would be adjusted to a fair market rental value as may be agreed to by the parties or as may be determined by an appraiser or arbitrator as provided in the Option to Extend Addendum. Payment of the lease has been personally guaranteed by Jack Amin and his wife, Nora Amin.  The Company believes this space will be sufficient for at least the next twelve months.

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The Company’s Dermagen, Inc. manufacturing operations are currently located at 2500 East Fender Avenue, Units I&J, Fullerton, California, which is leased under one lease agreement dated March 1, 2011.  The Company leases approximately 3,520 square feet at a rental rate of $2,464 per month.  The lease was amended in early 2012 to extend the lease term for a period of one year.  The lease will now expire on February 28, 2013.  Payment of the lease has been personally guaranteed by Jack Amin. The Company believes this space will be sufficient for at least the next twelve months.

The Company believes that the various facilities covered by the leases described above will be sufficient for at least the next twelve months.

The Company’s loan agreement with Nora Amin is verbal.  The Company does not have written contracts with its major suppliers or buyers.  The Company has a written line of credit agreement with National Bank of California.  Copies of the Company’s written lease agreements and material contracts have been filed as exhibits to certain of its quarterly and annual reports.  See the Exhibit Index for a description of these agreements and for information on where copies can be found.

Business Segments

Since 2005, Amexdrug has had operations in two segments of its business, namely:  Distribution and Health and Beauty Products.  Distribution consists of the wholesale pharmaceutical distribution and resale of brand and generic pharmaceutical products, over-the-counter drugs and non-drug products and health and beauty products.  Health and Beauty Products consist of the manufacture and distribution of primarily health and beauty products. Manufacturing includes expertise in research and development for health care industry products, including pharmacy supplies.

Results of Operations

For the Three Months Ended June 30, 2012

Revenues

For the three months ended June 30, 2012, Amexdrug reported sales of $2,314,704, comprised of $1,835,243 of sales from the Company’s pharmaceutical wholesale business of selling brand name and generic pharmaceutical products and over the counter(OTC) health and beauty products, and $479,460 of sales of health and beauty products manufactured by the Company.  This is $1,306,375less than the $3,621,079 of sales reported for the three months ended June 30, 2011, which was comprised primarily of $3,265,594 sales from the Company’s pharmaceutical wholesale distribution business of selling brand name and generic pharmaceutical products and over the counter (OTC) health and beauty products, and $355,485 of sales of health and beauty products manufactured by the Company.  During the three month period ended June 30, 2012, Amexdrug experienced a decrease in total sales due, in part, to declining sales of some brand name drugs which became generically available and also due to the loss of a few customers.

Costs of Goods Sold

Cost of goods sold for the three months ended June 30, 2012 was $2,058,776, a decrease of $1,240,926from the $3,299,702 cost of goods sold for the three months ended June 30, 2011.

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Gross Profit

During the three months ended June 30, 2012 gross profit decreased by $65,449to $255,928 or 11.1%of sales, from the $321,377, or 8.9% of sales recorded for the three months ended June 30, 2011.  The change in gross profit margin is largely attributable to a decrease in sales, partially offset by an increased percentage of sales of higher gross margin products sold in the three month period ended June 30, 2011.

Expenses

Total operating expenses for the three months ended June 30, 2012, consisting entirely of selling, general and administrative expenses, were $192,910, an increase of $1,904 from the total operating expenses of $191,006 recorded for the three months ended June 30, 2011.

Net Income

During the three months ended June 30, 2012, Amexdrug earned net income of $42,331, a decrease of $29,218 from the net income of $71,549 earned in the three months ended June 30, 2011.  Amexdrug’s decrease in net income during the three month period ended June 30, 2012 is attributable largely to the smaller gross profit generated from decreased sales of goods in the later period.

For the Six Months Ended June 30, 2012

Revenues

For the six months ended June 30, 2012, Amexdrug reported sales of $4,495,693, comprised of $3,623,318 of sales from the Company’s pharmaceutical wholesale business of selling brand name and generic pharmaceutical products and over the counter (OTC) health and beauty products, and $872,375 of sales of health and beauty products manufactured by the Company.  This is $1,966,104less than the $6,461,797 of sales reported for the six months ended June 30, 2011 which was comprised primarily of $5,712,283 of sales from the Company’s pharmaceutical wholesale distribution business of selling brand name and generic pharmaceutical products and over the counter (OTC) health and beauty products, and $749,514 of sales of health and beauty products manufactured by the Company.  During the six month period ended June 30, 2012, Amexdrug experienced a decrease in total sales due, in part, to declining sales of some brand name drugs which became generically available and also due to the loss of a few customers.

Costs of Goods Sold

Cost of goods sold for the six months ended June 30, 2012 was $3,879,127, a decrease of $1,829,988from the $5,709,115 cost of goods sold for the six months ended June 30, 2011.

Gross Profit

During the six months ended June 30, 2012 gross profit decreased by $136,116 to $616,566, or 13.7%of sales, from the $752,682, or 11.6% of sales recorded for the six months ended June 30, 2011.  The change in gross profit margin is largely attributable to a decrease in sales partially offset by an increased percentage of sales of higher gross margin products sold in the first six months of 2012.

Expenses

Total operating expenses for the six months ended June 30, 2012, consisting entirely of selling, general and administrative expense, were $381,683, an increase of $40,044 from the total operating expenses of $341,639 recorded for the six months ended June 30, 2011.  The increase in selling, general and administrative expense is primarily attributed to increased compensation paid to the Company’s President in the later period, partially offset by decreased commissions payable on the decreased sales in the later period.

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Net Income

During the six months ended June 30, 2012, Amexdrug earned net income of $146,418, a decrease of $89,246 from the net income of $235,664 experienced in the six months ended June 30, 2011.  Amexdrug's decrease in net income during the six month period ended June 30, 2012, is attributable largely to the smaller gross profit generated from decreased sales of goods in the later period.

Liquidity and Capital Resources – June 30, 2012

As of June 30, 2012, Amexdrug reported total current assets of $1,300,940, comprised of cash of $103,381, accounts receivable of $600,144, inventory of $545,753, prepaid expenses of $40,205, a deferred tax asset of $7,200, and an investment of $4,257. Total assets as of June 30, 2012 were $1,392,630 which included total current assets, plus net property and equipment of $44,983, other deposits of $28,212, Trademark of  $730, and goodwill of $17,765.

Amexdrug’s liabilities as of June 30, 2012 consisted of accounts payable of $438,175, notes payables to related parties of $108,023, business line of credit of $248,813, corporate tax payable of $61,677, accrued liabilities of $26,722, and deferred operating lease liability of $15,186.

During the six months ended June 30, 2012, Amexdrug used $98,354 cash in operating activities compared to $246,046 cash used in operating activities in the six months ended June 30, 2011.  The primary adjustments to reconcile net income to net cash used in operating activities during the six months ended June 30, 2012 were as follows:  a decrease in accounts receivable of $53,805, an increase in inventory of $347,577, and a decrease in accounts payable and accrued liabilities of $29,298.  Amexdrug had $103,381in cash and cash equivalents at June 30, 2012.  Operations have primarily been funded through cash generated from operations and an increase in the credit line balance when needed.  Management does not anticipate that Amexdrug will need to seek additional financing during the next twelve months.

Stock Repurchases

Between approximately June 2007 and June 30, 2012, Amexdrug repurchased a total of 14,672 shares of its common stock at prices ranging from a low of $0.20 per share to a high of $3.03 per share. These shares are held by Amexdrug as treasury shares. Amexdrug anticipates that it may make additional small purchases of its shares throughout the remainder of 2012.

Inflation

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

Capital Expenditures

The Company expended $0 and $3,801 on capital expenditures during the three month periods ended June 30, 2012 and 2011, respectively.  The Company has no current plans for any significant capital expenditures.

Critical Accounting Policies

In the notes to the audited consolidated financial statements for the year ended December 31, 2011, included in the Company’s Annual Report on Form 10-K, the Company discusses those accounting policies that are considered to be significant in determining the results of operations and its financial position. The Company believes that the accounting principles utilized by it conform to accounting principles generally accepted in the United States of America.

14

The preparation of financial statements requires Company management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, the Company evaluates estimates. The Company bases its estimates on historical experience and other facts and circumstances that are believed to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities.  The actual results may differ from these estimates under different assumptions or conditions.

Forward-looking statements

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

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

A “smaller reporting company” (as defined by Item 10 of the Regulation S-K) is not required to provide the information required by this Item.

Item 4.     Controls and Procedures.

Under the supervision and with the participation of management, our principal executive officer and principal financial officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”), as of June 30, 2012.  Based on this evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our chief executive officer and chief financial officer, in a manner that allowed for timely decisions regarding required disclosure.

During the last fiscal quarter ended June 30, 2012, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-Q REPORT REFLECT MANAGEMENT’S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS AND UNCERTAINTIES.  ACTUAL RESULTS MAY VARY MATERIALLY.

PART II - OTHER INFORMATION

Item 1.     Legal Proceedings.

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

Item 1A.  Risk Factors.

A “smaller reporting company” (as defined by Item 10 of the Regulation S-K) is not required to provide the information required by this Item.

15

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

During the three month period ended June 30, 2012, the Company did not issue any shares of its unregistered common stock.  For a description of any sales of shares of the Company’s unregistered stock made in the past three years, please refer to the Company’s Annual Reports on Form 10-KSB or Form 10-K, and the Company’s Quarterly Reports on Form 10-QSB or Form 10-Q filed since December 31, 2008.

Item 3.   Defaults Upon Senior Securities.

None; not applicable.

Item 4.    Mine Safety Disclosures.

None; not applicable.

Item 5.    Other Information.

None; not applicable.

Item 6.   Exhibits.

          (a)  Exhibits.

The following exhibits are filed as part of this report.

EXHIBIT INDEX

Exhibit		Exhibit
Number	Description	Location
2.1	Agreement and Plan of Merger (to change domicile from California)	*
2.2	Agreement and Plan of Reorganization	**
3.1	Articles of Incorporation	***
3.2	By-Laws	***
10.1	Promissory Note with National Bank of California dated June 23, 2008	*****
10.2	Change in Terms Agreementwith National Bank of California dated June 9, 2009	*****
10.3	Change in Terms Agreementwith National Bank of California dated March 3, 2009	******
10.4	Subordination Agreement between Nora Y. Amin, National Bank of California, Amexdrug and its subsidiaries dated June 9, 2009	******
10.5	Business Loan Agreementbetween National Bank of California, Amexdrug and its subsidiaries dated June 23, 2008	******

16

10.6	Commercial SecurityAgreementbetween National Bank of California, Amexdrug and its subsidiaries dated June 23, 2008	******
10.7	Commercial Guaranteebetween National Bank of California, Jack N. Amin, Amexdrug and its Subsidiaries	******
10.8	Commercial Guaranteebetween National Bank of California, Nora Y. Amin, Amexdrug and its subsidiaries	******
10.9	Lease Agreement between Fullerton Business Center, LLC, Lessor, and Allied Med, Inc., Lessee, dated March 1, 2011 (Units I & J)	*******
10.10	Guaranty of Lease by Jack Amin (Units I & J)	*******
10.11	Lease Agreement between Condor Associates, LLC, Lessor, and Allied Med, Inc., Lessee, dated February 22, 2011	*******
10.12	Guaranty of Lease by Jack Amin and Nora Amin	*******
10.13	First Amendment to Lease Extending Lease Term (Units I&J) dated January 18, 2012	********
10.14	Change in Terms Agreement with National Bank of California dated December 21, 2011	********
14.1	Code of Ethics	****
21.1	List of Subsidiaries of Amexdrug Corporation	******
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	This Filing
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	This Filing
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	This Filing
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	This Filing
101.INS	XBRL Instance Document	*********
101.SCH	XBRL Taxonomy Extension Schema	*********
101.CAL	XBRL Taxonomy Extension	*********
	Calculation Linkbase

17

101.DEF	XBRL Taxonomy Extension
	Definition Linkbase	*********
101.LAB	XBRL Taxonomy Extension	*********
	Label Linkbase
101.PRE	XBRL Taxonomy Extension
	Presentation Linkbase	*********
	Summaries of all exhibits contained within this report are modified in their entirety by reference to these Exhibits.
*	Exhibit 2.1 is incorporated by reference from Amexdrug’s Form 8-K Current Report filed December 21, 2001 as Exhibit No. 10.01.
**	Exhibit 2.2 is incorporated by reference from Amexdrug’s Form 8-K Current Report filed January 15, 2002 as Exhibit No. 10.01.
***	Exhibit 3.1 and 3.2 are incorporated by reference from Amexdrug’s Form 10-KSB for the year ended December 31, 2001 filed on April 1, 2002.
****	Exhibit 14.1 is incorporated by reference from Amexdrug’s Form 10-K for the year ended December 31, 2008 filed April 13, 2009
*****	Exhibits 10.1 and 10.2 are incorporated by reference From Amexdrug’s Form 10-Q for the period ended June 30, 2009 filed August 14, 2009
******	Exhibits 10.3 through 10.8 and 21.1 are incorporated by reference from Amexdrug’s Form 10-Q/A for the period ended June 30, 2009 filed September 18, 2009
*******	Exhibits 10.9 through 10.12 are incorporated by reference from Amexdrug’s Form 10-K for the year ended December 31, 2010 filed March 31, 2011
********	Exhibits 10.13 and 10.14 are incorporated by reference from Amexdrug’s Form 10-K for the Year ended December 31, 2011 filed March 31, 2012
*********	Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

18

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMEXDRUG CORPORATION
Date: August 9, 2012	By: /s/ Jack Amin
	Jack Amin
	Director, President, Chief Executive Officer,
	Chief Financial Officer and Chief Accounting
	Officer

19

EX-31.1

EXHIBIT 31.1

SECTION 302

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jack Amin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Amexdrug Corporation,

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012	/s/ Jack Amin
	Jack Amin, Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Jack Amin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Amexdrug Corporation,

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012	/s/ Jack Amin
	Jack Amin, Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Amexdrug Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jack Amin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Jack Amin

Jack Amin

Chief Executive Officer

August 9, 2012

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certifications are accompanying the Company's Form 10-Q solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and are not being filed as part of the Form 10-Q or as a separate disclosure document.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Amexdrug Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jack Amin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Jack Amin

Jack Amin

Chief Financial Officer

August 9, 2012

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certifications are accompanying the Company's Form 10-Q solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and are not being filed as part of the Form 10-Q or as a separate disclosure document.

XML

4. Income Taxes

3 Months Ended

Jun. 30, 2012

4. Income Taxes:

4. Income Taxes

4.   INCOME TAXES

        The Company files income tax returns in the U.S. Federal jurisdiction, and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2009.

        The Company accounts for uncertainty in tax positions by recognition in the financial statements. 

        The Company's policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

XML

3. Capital Stock

3 Months Ended

Jun. 30, 2012

3. Capital Stock:

3. Capital Stock

3.     CAPITAL STOCK

During the six months ended June 30, 2012, the Company issued no shares of common stock.

XML

CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2012	Dec. 31, 2011
Cash	$ 103,381	$ 589,472
Investment	4,257	2,112
Accounts receivable, net of allowance of $21,561 and 37,000, respectively	600,144	653,949
Prepaid expenses	40,205	45,513
Inventory	545,753	198,176
Deferred tax asset	7,200	12,600
Total Current Assets	1,300,940	1,501,822
Office and computer equipment	239,752	239,752
Leasehold improvements	15,700	15,700
Property and Equipment, gross	255,452	255,452
Less accumulated depreciation	(210,469)	(205,562)
Net Property and Equipment	44,983	49,890
Other deposits	28,212	28,212
Customer base, net of accumulated amortization of $18,259
Trademark, net of accumulated amortization of $920 and $837, respectively	730	813
Goodwill	17,765	17,765
Total Other Assets	46,707	46,790
Total Assets	1,392,630	1,598,502
Accounts payable	438,175	463,098
Accrued liabilities	26,722	31,098
Deferred operating lease liability	15,186	14,132
Corporate taxes payable	61,677
Notes payable related parties	108,023	109,694
Business lines and short term promissory note	248,813	631,903
Total Current Liabilities	898,596	1,249,925
Common stock, $0.001 par value; 50,000,000 authorized common shares 8,470,481 shares issued and outstanding	8,471	8,471
Additional paid in capital	83,345	83,345
Treasury stock	(14,933)	(13,972)
Retained earnings	417,151	270,733
Total Shareholders' Equity	494,034	348,577
Total Liabilities and Shareholders' Equity	$ 1,392,630	$ 1,598,502

XML

1. Basis of Presentation

3 Months Ended

Jun. 30, 2012

1. Basis of Presentation:

1. Basis of Presentation

1.     Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.  For further information refer to the financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2011.

XML

2. Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2012

2. Summary of Significant Accounting Policies:

2. Summary of Significant Accounting Policies

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Amexdrug Corporation is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

        Income per Share Calculations

Income per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted income per share is the same as the basic income per share for the six months ended June 30, 2012, because there are no outstanding dilutive instruments.

XML

CONSOLIDATED BALANCE SHEETS PARENTHETICAL (USD $)	Jun. 30, 2012	Dec. 31, 2011
Allowance for doubtful accounts receivable	$ 21,561	$ 37,000
Amortization of customer relationships	18,259	18,259
Accumulated amortization - trademarks	$ 920	$ 837
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	50,000,000	50,000,000
Common stock shares issued	8,470,481	8,470,481
Common stock shares outstanding	8,470,481	8,470,481

XML

Document and Entity Information	3 Months Ended
	Jun. 30, 2012	Aug. 06, 2012
Document and Entity Information
Entity Registrant Name	AMEXDRUG CORP
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Entity Central Index Key	0000045621
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		8,470,481
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Sales	$ 2,314,704	$ 3,621,079	$ 4,495,693	$ 6,461,797
Cost of Goods Sold	2,058,776	3,299,702	3,879,127	5,709,115
Gross Profit	255,928	321,377	616,566	752,682
Selling, general and administrative expense	192,910	191,006	381,683	341,639
Total Operating Expenses	192,910	191,006	381,683	341,639
Income before depreciation expense	63,018	130,371	234,883	411,043
Depreciation and amortization expense	2,518	1,215	4,989	2,171
Income before Other Income/(Expenses)	60,500	129,156	229,894	408,872
Interest and other income	1	3	3	3
Penalty		(3,877)		(4,098)
Unrealized gain/(loss)	(1,286)	(418)	130	(892)
Interest expense	(5,851)	(7,642)	(11,224)	(14,068)
Total Other Income/(Expenses)	(7,136)	(11,934)	(11,091)	(19,055)
Income before Provision for Income Taxes	53,364	117,222	218,803	389,817
Income tax expense	(11,033)	(45,673)	(72,385)	(154,153)
Net Income	$ 42,331	$ 71,549	$ 146,418	$ 235,664
BASIC AND DILUTED INCOME PER SHARE	$ 0.00	$ 0.01	$ 0.02	$ 0.03
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED	8,470,481	8,470,481	8,470,481	8,470,481

XML

7. Commitments and Contingencies

3 Months Ended

Jun. 30, 2012

7. Commitments and Contingencies:

7. Commitments and Contingencies

7.     COMMITMENTS AND CONTINGENCIES

        Operating Leases                                                                                                                                     

The Company's principal executive offices and its warehouse and distribution operations moved to 7251 Condor Street, Commerce California in March 2011.  The company leases 27,500 square feet at a rental rate of $7,700 per month.  The rental amount is scheduled to increase to $8,800 per month effective March 1, 2013.

XML

6. Subsequent Event

3 Months Ended

Jun. 30, 2012

6. Subsequent Event:

6. Subsequent Event

6.   SUBSEQUENT EVENT

        Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has determined there are no subsequent events to be reported.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Net income	$ 146,418	$ 235,664
Depreciation and amortization	4,989	2,171
Unrealized (gain)/loss on investment	(130)	892
(Increase) Decrease in accounts receivable	53,805	(423,537)
(Increase) Decrease in inventory	(347,577)	(35,217)
(Increase) Decrease in prepaid expenses	5,308	8,079
(Increase) Decrease in deferred tax asset	5,400	8,053
(Increase) Decrease in other assets		(13,750)
Increase (Decrease ) in accounts payable and accrued liabilities	(29,298)	(31,999)
Increase (Decrease ) in deferred operating lease liability	1,054	9,778
Increase (Decrease ) in corporate income tax payable	61,677	(6,181)
NET CASH USED IN OPERATING ACTIVITIES	(98,094)	(246,046)
Proceeds from the sale of investment	(2,015)	1,104
Purchase of fixed assets		(11,291)
NET CASH USED IN INVESTING ACTIVITIES	(2,015)	(10,187)
Advances to officer	(1,671)	(7,702)
Purchase of treasury stock	(961)	(1,104)
Proceeds from credit line	(383,090)	(27,505)
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES	(385,722)	(36,311)
NET INCREASE/(DECREASE) IN CASH	(486,091)	(292,544)
CASH, BEGINNING OF PERIOD	589,472	443,703
CASH, END OF PERIOD	103,381	151,159
Interest paid	5,840	9,747
Income taxes		$ 43,977

XML

5. Business Segment Information

3 Months Ended

Jun. 30, 2012

5. Business Segment Information:

5. Business Segment Information

5.   BUSINESS SEGMENT INFORMATION

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

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

		Health and
		Beauty
	Distributions	Products	Total
For the period ended June 30, 2012
Sales to external customers	$3,623,318	$872,375	$4,495,693
Depreciation and amortization	1,694	3,295	4,989
Segment income (loss) before taxes	69,946	148,857	218,803
Segment assets	652,058	740,572	1,392,630
For the period ended June 30, 2011
Sales to external customers	$5,712,283	$749,514	$6,461,797
Depreciation and amortization	1,617	554	2,171
Segment income (loss) before taxes	314,093	75,724	389,817
Segment assets	959,010	563,987	1,522,997