Manasota Group Inc. (fka HZNB)

[db7]

from 10Q filed today,


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On April 26, 2013, we received a letter from the Office of Enforcement Liaison in the SEC's Division of Corporation Finance. The letter informed the Company that if we do not take the necessary steps to return the Company into compliance with its reporting requirements under the Exchange Act within the next fifteen days, the SEC may commence administrative proceedings to revoke our registration under the Exchange Act and impose a trading suspension with respect to the Common Stock. On May 6, 2013, we filed a letter with the SEC setting forth a plan for returning into such compliance by filing the Annual Report on Form 10-K for 2011 on or before May 31, 2013, and all other delinquent periodic reports on or before July 31, 2013, and requesting that no such administrative proceedings or trading suspension be commenced at this time. With the filing of this Report, we would have filed all of the delinquent reports.



As stated above, the Building Lease expires on September 10, 2013, and the Building Note matures on August 31, 2013. As of the filing date of this Report, we have been informed that Bank of the Ozarks does not intend to renew the Building Lease. Contemporaneously, we have also received assurances from the holder of the Building Note that it is the holder's intention to renew the Building Note for a period of time sufficient for us to obtain a new tenant or sell the Building. We have also been informed that a financial institution intends to (i) become a tenant in the Building commencing at the end of the lease with Bank of the Ozarks and (ii) include in the lease an option to purchase the Building at any time after the first twelve months of its lease. Based on preliminary discussions, the net rent payable under the intended lease would exceed the debt service under the renewed Building Note.

Management is also considering using the Company's potential status as a fully reporting public company to engage in a transaction in which a carefully selected privately held operating company would merge into the Company, i.e. a reverse merger. As a result of such a merger, whether or not the Building would in the meantime been sold, voting control of the Company would be held by the shareholders of the operating company. With the filing of this, the last of the delinquent reports, we intend to take all other steps necessary to restore the Company's fully reporting status so that it can act as a viable merger candidate.

While we believe that the intended renewal of the Building Note and new lease has a high likelihood of resulting in a completed transaction, in the absence of definitive binding documents, as of the filing date of this Report, there is no complete assurance that on September 10, 2013, the Building will be leased and remain subject to a mortgage with a maturity date sufficiently in the future. There is also no complete assurance that we will be able to restore our status as a fully reporting public company and, even if we do, that we will be able to find the private operating company whose business has sufficient upside potential and where the terms and conditions of a merger with such company are in the best interests of our shareholders.

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