AXRX AmexDrug Corporation (CE)

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

FORM 10-KSB/A
(Amendment No. 2)

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

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

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

For the transition period from _______________ to _________________

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

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

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

Title of each class Name of each exchange on which registered
 None None
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Securities registered under Section 12(g) of the Act:

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

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

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE REGISTRANTS

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

DOCUMENTS INCORPORATED BY REFERENCE

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

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

NOTE: The annual report is being amended for the following purposes:

1. To add disclosure under Item 8A Controls and Procedures concerning management's annual report on internal control over financial reporting;

2. To correct disclosure under Item 8A Controls and Procedures concerning management's evaluation of its disclosure controls and procedures; and

3. To provide corrected certifications filed as Exhibits 31.1 and 31.2 which inadvertently omitted the portion of the language in the introduction to the fourth paragraph and in paragraph 4(b) relating to internal control over financial reporting.

TABLE OF CONTENTS

 Page
PART I ----
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ITEM 1. DESCRIPTION OF BUSINESS......................................... 4

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

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

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


PART II
-------

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

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

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

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

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

ITEM 8B. OTHER INFORMATION............................................... 37


PART III
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ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
 PERSONS; COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE
 ACT............................................................. 37

ITEM 10. EXECUTIVE COMPENSATION.......................................... 39

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
 MANAGEMENT...................................................... 41

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................. 42

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K................................ 43

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.......................... 44

PART I

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

ITEM 1. DESCRIPTION OF BUSINESS

General

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

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

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

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

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

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

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

Significant acquisitions

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

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

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

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

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

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

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.

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

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

Industry trends

Pharmaceutical and healthcare markets

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

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

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

Internet

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

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

Objectives and strategy

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

To accomplish this objective, Amexdrug plans to:

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

Sales and marketing, customer service and support

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

Direct sales

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

Telemarketing

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

Blast faxing

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

Advertising

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

Customer service and support

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

Promotion of website

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

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

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

Distribution

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

Purchasing and Manufacturing

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

Technology and security

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

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

Management information system

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

Competition

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

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

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

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

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

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

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

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

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

Government regulations and legal uncertainties

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Proprietary rights

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

Dependence on major suppliers

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

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

Dependence on major customers

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

Employees

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

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

Physical facilities

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

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

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

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

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

Asset acquisitions following the acquisition of Allied Med, Inc.

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

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

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

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

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

New subsidiaries formed

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

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

ITEM 2. DESCRIPTION OF PROPERTIES

Operating facilities

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

Executive offices and Allied Med operations

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

ITEM 3. LEGAL PROCEEDINGS

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

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

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

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market information

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

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

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

Holders

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

Dividends

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

Recent sales of unregistered securities

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

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

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

Overview

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

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

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

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

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

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

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

Results of operations

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

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

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

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

Liquidity and capital resources - December 31, 2007

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

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

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

Forward-looking statements

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

ITEM 7. FINANCIAL STATEMENTS

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

AMEXDRUG CORPORATION AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

 Page
 ----

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

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

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

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

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

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

Board of Directors
Amexdrug Corporation.
Beverly Hills, California

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

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

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

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

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

HANSEN, BARNETT & MAXWELL, P.C.
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
5 Triad Center, Suite 750
Salt Lake City, UT 84180-1128

Phone: (801) 532-2200
Fax: (801) 532-7944
www.hbmcpas.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

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

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

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

HANSEN, BARNETT & MAXWELL, P.C.

Salt Lake City, Utah
April 9, 2007

AMEXDRUG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

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

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

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

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

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

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

AMEXDRUG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

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

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

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

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

Income Before Income Taxes 16,172 19,784

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

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

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

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

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

AMEXDRUG CORPORATION AND SUBSIDIARIES
STATEMENTS OF STOCKHOLDERS EQUITY

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

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

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

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

AMEXDRUG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

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

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

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

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

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

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

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

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

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

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

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

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

AMEXDRUG CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NOTE 2 - INTANGIBLE ASSETS

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

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

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

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

NOTE 3 - Leases

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

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

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

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

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

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

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

NOTE 4 - Income taxes

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

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

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

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

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

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

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

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

NOTE 5 - RELATED PARTY TRANSACTIONS

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

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

NOTE 6 -- BANK LINE OF CREDIT

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

NOTE 7 --SEGMENT INFORMATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ITEM 8A. CONTROLS AND PROCEDURES

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

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

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

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

o We overlooked the inclusion of our management's annual report on internal control over financial reporting in our initial annual report filed on Form 10-KSB for the year ended December 31, 2007, and as a result we determined that we had a material weakness in our ability to determine certain changes in the laws that affect our disclosure obligations.

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

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

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

o Before each report is prepared, we will review the Commission's website, www.sec.gov, in an effort to determine any recent changes in the laws affecting our disclosure obligations; and

o As each report is prepared, we will discuss with our independent consultants who assist us in the preparation of the reports and financial statements included within the reports whether they are aware of any recent changes in the laws affecting our disclosure obligations.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed 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. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance of achieving their control objectives. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based upon this evaluation and as a result of the material weakness discussed below, our management, including the Chief Executive Officer and Principal Financial Officer, has concluded that our internal controls over financial reporting were not effective as of December 31, 2007. Management nevertheless has concluded that the consolidated financial statements included in this Form 10-KSB/A present fairly, in all material respects, the results of our operations and our financial position for the periods presented in conformity with generally accepted accounting principles.

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

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

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

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

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

Other than as described above, during the quarter ended December 31, 2007, there has been no change in our internal controls over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the management's report in this annual report.

ITEM 8B. OTHER INFORMATION

None.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL

PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Identification of directors and executive officers

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

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

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

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

Behrooz Meimand 59 Director December 2001

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

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

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

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

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

Significant employees

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

Family relationships

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

Involvement in certain legal proceedings

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

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

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

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

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

Section 16(a) beneficial ownership reporting compliance

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

ITEM 10. EXECUTIVE COMPENSATION

Cash compensation

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

SUMMARY COMPENSATION TABLE

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

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

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

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

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

Compensation of directors

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

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

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

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

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

Compensation pursuant to plans; pension table

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

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

Other compensation

None.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security ownership of certain beneficial owners

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

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

Jack Amin 7,755,000(1) 91.6%

8909 West Olympic Blvd.
Suite 208
Beverly Hills, CA 90211

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

Security ownership of management

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

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

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

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

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

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

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

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

Changes in control

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with management and others

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

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

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

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

Parents of the company

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

Transactions with promoters

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

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

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

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

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

3.1 Articles of Incorporation***

3.2 By-Laws***

21.1 List of Subsidiaries of Amexdrug Corporation***

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

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

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

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

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

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

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

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

(b) Reports on Form 8-K

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

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

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

Audit-Related Fees

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

Tax Fees

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

All Other Fees

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

Pre-Approved Policies and Procedures

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

SIGNATURES

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

AMEXDRUG CORPORATION

Date: August 12, 2008 By /s/ Jack Amin
 ----------------------------------
 Jack Amin, Director, President and
 Chief Executive Officer

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

Date: August 12, 2008 By /s/ Jack Amin
 ----------------------------------
 Jack Amin, Director, President and
 Chief Executive Officer, Chief
 Financial Officer and Chief
 Accounting Officer



Date: August 12, 2008 By___________________________________
 Rodney Barron, M.D., Director



Date: August 12, 2008 By /s/ Behrooz Meimand
 -------------------------
 Behrooz Meimand, Director

EXHIBIT INDEX

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

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

 2.2 Agreement and Plan of Reorganization **

 3.1 Articles of Incorporation ***

 3.2 By-Laws ***

21.1 List of Subsidiaries of Amexdrug ***
 Corporation

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

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

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

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

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

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

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

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

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