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SUPPLEMENTAL INFORMATION AND DISCLOSURE STATEMENT THE SUSTAINABLE GREEN TEAM, LTD.
A Delaware Corporation
24-200 County Road Astatula, FL 34705
Telephone: (407) 886-8733
Corporate Website: www.thesustainablegreenteam.com Corporation Email: info@nationalarborcare.com
________________________________ SIC - 0783
Trading Symbol: SGTM
OTC Pink Supplemental Disclosure– Current Reporting of Material Corporate Events Entry Into a Material Definitive Agreement
As reported by The Sustainable Green Team, Ltd. (the “Company”) in its Financial Statements and Notes for the fiscal quarter ended July 2, 2022, which were uploaded to OTC Markets on August 22, 2022, on August 9, 2022, the Company entered into a restricted sub- license agreement (the “Agreement”) with an innovative soil technology company, VRM Global Holdings Pty Ltd, and its wholly owned subsidiary VRM International PTY LTD (referred to herein together as the “Licensor”). Pursuant to the Agreement, the Licensor agreed to grant the Company a restricted sub-license (the “Sub-License”), pursuant to which the Licensor will allow the Company to use certain rights and entitlements as identified in the Agreement and provide the Company with certain products as identified in the Agreement, and referred to therein as the inputs, which will allow the Company to manufacture soil products from its existing and future fiber products.
Pursuant to the Agreement, in consideration of the grant of the Sub-License, the Company agreed to issue to the Licensor, 500,000 shares of its common stock simultaneously with the execution of the Agreement. Additionally, in consideration of the grant of the Sub- License, the Company agreed to make to the Licensor, two (2) cash payments of $500,000 each, conditioned on the Company reaching a certain milestone, and if reached, to be paid with the first payment due upon the achievement of such milestone within the calendar year 2022 and the second payment due on the one (1) year anniversary of the first payment.
The Term of the Agreement is for a period of five (5) years. Pursuant to the Agreement, if the milestone is not achieved and the initial cash payment is not made by February 4, 2023, the
Licensor may in its sole discretion terminate the Agreement. The Agreement can also be terminated at any time by the written agreement of the parties.
For additional information regarding the Licensor, please refer to their website at: https://
www.vrmbiologik.com/. Please note that the information contained on, or accessible through, the foregoing website is not a part of, and is not incorporated by reference into, this Supplemental Information and Disclosure Statement.
The entry into the Agreement, as well as the activities contemplated thereby, did not and do not, constitute a change in control, as the Company’s largest shareholder remains unchanged and no other person became the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities. Additionally, there was no change in the composition of the Company’s board of directors and nor was there any change to the officers of the Company. Accordingly, there was no change in control of the Company.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This disclosure statement contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward- looking terminology such as “may,” “will,” “should,” “potential,” “plan,” “intend,” “expect,” “outlook,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, or state other forward-looking information. Our ability to predict future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, actual outcomes could differ materially from those set forth or anticipated in our forward-looking statements. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this disclosure statement. Furthermore, except as required by law, we are under no duty to, and do not intend to, update any of our forward-looking statements after the date of this disclosure statement, whether as a result of new information, future events or otherwise.
The Sustainable Green Team, Ltd.
Date: September 6, 2022 Signature: /s/ Anthony J. Raynor Name: Anthony J. Raynor
Title: Chief Executive Officer
Stock option agreements tied to performance, market capitalization reaching $50 million, $100 million and $200 million.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 12, 2022
Progressive Care Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-52684 32-0186005
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
400 Ansin Blvd., Suite A
Hallandale Beach, FL 33009
(Address of Principal Executive Offices) (Zip Code)
(305) 760-2053
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
? Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
? Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
? Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
? Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: None
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Directors
On September 13, 2022, Progressive Care Inc. (the “Company”) appointed Charles M. Fernandez as Chairman of the Board of Directors (“Chairman”) of the Company and Rodney Barreto as the Vice Chairman of the Board of Directors (“Vice Chairman”) of the Company. In connection with these appointments, Alan Jay Weisberg, the Company’s current Chairman and Chief Executive Officer, was appointed to serve as a Vice Chairman of the Company’s Board of Directors.
Charles M. Fernandez
Mr. Fernandez, age 60, has extensive experience identifying profitable start-up and dislocation opportunities, building significant value and executing both private and public exit strategies. Mr. Fernandez has served as NexPlat Corp’s Executive Chairman since May 28, 2021 and its Chief Executive Officer since June 5, 2021. Mr. Fernandez was a co-founder and the Chairman of Kempstar (a large-scale marketer of energy and agricultural commodities) from November 2015 through June 2020; a member of the Supervisory Board of Smartrac (a RFID products and IoT solutions) from January 2019 through March 2020; Chief Executive Officer of eApeiron Solutions (a brand protection and e-commerce company) from June 2016 through December 2018; served as the founder and Chief Investment Officer of Barnstar Funds, LP (a fund established in 2012 for investment in special situations across the capital markets) from October 2012 through March 2016; and co-founder and Chairman of Lakeview Health Systems, LLC (a private pay, specialized hospital company) from December 2003 through December 2012.
The Company and Mr. Fernandez have agreed to enter into a stock option agreement (the “Fernandez Option Agreement”), in connection with Mr. Fernandez’s appointment as Chairman, pursuant to which Mr. Fernandez will receive options to purchase up to 5% of the Company’s issued and outstanding stock as measured on the date the options are granted under the Fernandez Option Agreement (the “grant date”), at an exercise price of $0.02 per share. The options under the Fernandez Option Agreement will vest as follows:
? Mr. Fernandez will have options to purchase up to 2% of the Company’s issued and outstanding stock, as measured on the grant date, immediately upon the effectiveness of the Fernandez Stock Option Agreement;
? Upon Company’s market capitalization reaching $50 million for five consecutive trading days, Mr. Fernandez will have the option to purchase up to an additional 1% of the Company’s issued and outstanding stock, as measured on the grant date;
? Upon the Company’s market capitalization reaching $100 million for five consecutive trading days, Mr. Fernandez will have the option to purchase up to an additional 1% of the Company’s issued and outstanding stock, as measured on the grant date; and
? Upon the Company’s market capitalization reaching $200 million for five consecutive trading days, Mr. Fernandez will have the option to purchase up to an additional 1% of the Company’s issued and outstanding stock, as measured on the grant date.
Rodney Barreto
Mr. Barreto, age 64, has extensive leadership and entrepreneurial experience. Mr. Barreto has served on the Board of Directors of NextPlat Corp since January 20, 2022. Mr. Barreto is President and CEO of the Barreto Group and of Barreto Hospitality since their founding. The Barreto Group, which was founded in 1988, is a diversified company specializing in corporate and public affairs consulting, real estate investment, and development. Barreto Hospitality, which was founded in 2020, is the food, beverage, and hospitality arm of NextPlat Corp., boasting a wide array of dining and entertainment venues across South Florida. Mr. Barreto is also the founding partner of Floridian Partners, LLC. Floridian Partners LLC, which was founded in 2000, is a consulting firm that develops and manages effective corporate and public affairs strategies designed to achieve specific business results. Mr. Barreto has also served as the CEO of Barreto Capital, LLC, a private money lender, since November 2018. Mr. Barreto has chaired the Super Bowl Host Committee a record three (3) times, in the years 2007, 2010 and 2020.
The Company and Mr. Barreto have agreed to enter into a stock option agreement (the “Barreto Option Agreement”), in connection with Mr. Barreto’s appointment as Vice Chairman, pursuant to which Mr. Barreto will receive options to purchase up to 4% of the Company’s issued and outstanding stock as measured on the date the options are granted under the Barreto Option Agreement (the “grant date”), at an exercise price of $0.02 per share. The options under the Barreto Option Agreement will vest as follows.
? Mr. Barreto will have options to purchase up to 1% of the Company’s issued and outstanding stock, as measured on the grant date, immediately upon the effectiveness of the Barreto Stock Option Agreement;
? Upon Company’s market capitalization reaching $50 million for five consecutive trading days, Mr. Barreto will have the option to purchase up to an additional 1% of the Company’s issued and outstanding stock, as measured on the grant date;
? Upon the Company’s market capitalization reaching $100 million for five consecutive trading days, Mr. Barreto will have the option to purchase up to an additional 1% of the Company’s issued and outstanding stock, as measured on the grant date; and
? Upon the Company’s market capitalization reaching $200 million for five consecutive trading days, Mr. Barreto will have the option to purchase up to an additional 1% of the Company’s issued and outstanding stock, as measured on the grant date.
The appointments of Mr. Fernandez and Mr. Barreto were made pursuant to the Company’s entry into a Securities Purchase Agreement (the “SPA”) with NextPlat Corp (NASDAQ: NXPL, NXPLW) (“NextPlat”), pursuant to which NextPlat purchased 3,000 newly issued units of securities from the Company (the “Units”) at a price per Unit of $2,000, for an aggregate purchase price of $6 million, with each Unit consisting of one share of Series B Convertible Preferred Stock of the Company and one warrant to purchase a share of Series B Preferred Stock, as had been previously disclosed. In addition, the Company is obligated to pay Messrs. Fernandez and Barreto interest and principal payments under that certain Amended and Restated Convertible Promissory Note dated September 2, 2022, which obligation was acquired by Messrs. Fernandez and Barreto and certain other investors from Iliad Research and Trading, L.P. on September 2, 2022.
Resignation of Directors
On September 12, 2022, Birute Norkute, the Company’s Chief Operating Officer, notified Progressive Care, Inc. (the “Company”) of her resignation as Director, with such resignation to become effective immediately. Such resignation is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices, and Ms. Norkute will continue to serve as Chief Operating Officer.
On September 12, 2022, Oleg Firer notified the Company of his resignation as Director, and any other positions held with the Company or any of its subsidiaries, regardless of whether Mr. Firer had been appointed, with such resignations to become effective immediately. Such resignation is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
The foregoing descriptions of each of the Fernandez Option Agreement and the Barreto Option Agreement are qualified in their entirety by reference to the full text of such agreements. The Company will file the complete Fernandez Option Agreement and the Barreto Option Agreement as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter that will end on September 30, 2022.
Item 8.01. Other Events.
On September 15, 2022, the Company issued a press release related to the appointments and resignations described above (the “Press Release”). The Press Release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
99.1 Press Release
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PROGRESSIVE CARE, INC.
Date: September 16, 2022 By: /s/ Alan Jay Weisberg
Name: Alan Jay Weisberg
What a great close for the weekend.
It usually indicates an upward trend is in progress.
From the information on this new management they are associated or connected with deep pockets. I think when insider talk happens we will see some 8-10 million trades per day average.
We now have bullish golden cross on RXMD.
Bank of America (BAC) Receives a Rating Update from a Top Analyst
Source: TipRanks
RBC Capital analyst Gerard Cassidy maintained a Buy rating on Bank of America (BAC - Research Report) on September 12 and set a price target of $40.00. The company's shares closed yesterday at $33.87.Cassidy covers the Financial sector, focusing on stocks such as Morgan Stanley, Bank of America, and Bank of New York Mellon Corporation. According to TipRanks, Cassidy has an average return of 21.4% and a 66.92% success rate on recommended stocks. Currently, the analyst consensus on Bank of America is a Moderate Buy with an average price target of $42.66, a 25.95% upside from current levels.
https://www.tipranks.com/news/blurbs/bank-of-america-bac-receives-a-rating-update-from-a-top-analyst?utm_source=advfn.com&utm_medium=referral
Yes, RXMD is now the hands of a whole new management team. Hope they can fast track this along. I still judge people by their actions, so let’s see if they bring their A game to RXMD.
Yes we have a whole new top down management team in place. I’m excited about RXMD future.
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Progressive Care Announces New Chairman and Vice-Chairman of the Board
See on website
MIAMI, FL – September 15, 2022 – Progressive Care Inc. (OTCQB: RXMD) (“Progressive Care” or the “Company”), a personalized healthcare services and technology company, is pleased to announce the appointments of Charles M. Fernandez as its new Chairman of the Board and Rodney Barreto as Vice-Chairman of the Board effective September 13, 2022.
“I am privileged to take on the role of Chairman at such an exciting time for Progressive Care. I look forward to working closely with the Board and its leadership team to help ensure that during a time when technology is rapidly transforming the healthcare industry, that Progressive Care can continue to innovate and make a positive impact on all stakeholders for years to come,” said Charles Fernandez.
Mr. Fernandez is the Executive Chairman and CEO of NextPlat Corp (NASDAQ: NXPL) and has over 30 years’ experience in identifying profitable start-up and dislocation opportunities, building significant value, and executing exit strategies as an entrepreneur and global investor. In 2008, Charles M. Fernandez joined Fairholme Capital Management. As President, he co-managed all three Fairholme funds, and was commended for bringing in a $2 billion gain for shareholders. Throughout his impressive career in Media, Pharmaceuticals, Healthcare, Finance and Technology, he has participated in more than 100 significant mergers, acquisitions, and product development projects. Mr. Fernandez was the founder, Chairman, and CEO of eApeiron Solutions, LLC, a brand protection and e-commerce company in partnership with Alibaba (NYSE:BABA) and Eastman Kodak (NYSE: KODK) which was successfully sold to Smartrac, leading developer, manufacturer, and supplier of RFID and Internet of Things (“IoT”) solutions, a unit of Avery Dennison Corporation (NYSE: AVY).
“I share in Progressive Care’s belief that technology has the potential to significantly improve patients' lives and create healthier communities,” said Rodney Barreto. “It’s my honor to join Progressive Care’s Board of Directors and to be part of a company that is committed to enhancing chronic care management through constant innovation.”
Mr. Barreto's business career spans over 35 years including his role at the Barreto Group and earlier, as the founding partner of Floridian Partners, LLC, a corporate and public affairs consulting firm recognized by policy makers as one of the top in its industry in Florida. He has chaired the Super Bowl Host Committee in 2007, 2010 and 2020, helping to raise more than $100 million dollars for the success of Miami Super Bowls. As a philanthropist and conservationist, Mr. Barreto is also a three-time appointee to the Florida Fish and Wildlife Conservation Commission after having been appointed first by Governor Jeb Bush, the Governor Charlie Crist, and most recently by Governor Ron DeSantis where he has served for over 10 years including holding the title of Chairman eight times. He has twice chaired the Annual U.S. Conference of Mayors, was Chairman of the 1999 Breeder's Cup Championship held in South Florida and was the Chairman of the 1999 Sister Cities International Convention in Miami. Currently, Mr. Barreto is the Membership Chairman of the Florida Council of 100, and a member of the Boards of Fairchild Tropical Botanic Garden, the Baptist Health South Florida Giving Society, the Bonefish and Tarpon Trust, the Guy
Harvey Ocean Foundation, and a member of Miami Dade County Schools Superintendent Carvalho's Business Advisory Council. Prior to his career in public affairs and real estate, Mr. Barreto was a City of Miami police officer and is a member of the Florida Highway Patrol Advisory Council.
Oleg Firer and Birute Norkute have resigned from the Company’s Board effective September 12, 2022. Ms. Norkute will continue to serve as the company’s Chief Operations Officer and Alan Jay Weisberg has assumed the new role of Co-Vice Chairman, remaining on the Board, while also continuing to serve as Progressive Care’s Chief Executive Officer.
“We are pleased to welcome Charlie and Rodney to Progressive's Board and are confident they will provide valuable leadership and perspectives as we continue to execute our growth strategy and drive profitability, enhancing value for our shareholders,” said Mr. Weisberg.
“Progressive Care is immensely grateful for Oleg’s dedication and support over the years, as he contributed his knowledge, expertise and insights to our Board. We wish him an abundance of success in his current mission and prosperity in his future endeavors,” concluded Mr. Weisberg.
For more information about Progressive Care, please visit the company’s website.
Connect and stay in touch with us on social media:
Progressive Care Inc.
https://www.progressivecareus.com/
https://twitter.com/ProgressCareUS
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https://www.pharmcorx.com/
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https://www.clearmetrx.com/
https://www.facebook.com/clearmetrx/
About Progressive Care
Progressive Care Inc. (OTCQB: RXMD), through its subsidiaries, is a Florida health services organization and provider of prescription pharmaceuticals, compounded medications, provider of tele-pharmacy services, the sale of anti-retroviral medications, medication therapy management (MTM), the supply of prescription medications to long-term care facilities, and health practice risk management.
Cautionary Statement Regarding Forward-Looking Statements Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company’s expectations about its future operating results, performance, and opportunities that involve substantial risks and uncertainties. These statements include but are not limited to statements regarding departure of the company’s CEO. When used herein, the words “anticipate,” “believe,” “estimate,” “upcoming,” “plan,” “target,” “intend” and “expect” and similar expressions, as they relate to Progressive Care Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
Public Relations Contact:
Carlos Rangel
carlosr@pharmcorx.com
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30 minutes of trading and no volume. Very slow day.
Now that the partnership deal is completed and the debt is converted at .02, that could be the base for the reverse split if the share price doesn’t increase before February 2023. Let’s hope this partnership can get RXMD the respect it deserves.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Progressive Care Inc.
(Name of Issuer)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
74332G108
(CUSIP Number)*
Charles M. Fernandez
NextPlat Corp
3250 Mary St., Suite 410
Coconut Grove, FL 33133
(305) 560-5355
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 8, 2022
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ?
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 74332G108 SCHEDULE 13D Page 1 of 8 Pages
1
NAME OF REPORTING PERSONS
NextPlat Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ?
(b) ?
3 SEC USE ONLY
4
SOURCE OF FUNDS
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
?
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
NUMBER OF SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH 7
SOLE VOTING POWER
669,801,862(1)
8
SHARED VOTING POWER
725,643,351(2)
9
SOLE DISPOSITIVE POWER
669,801,862(1)
10
SHARED DISPOSITIVE POWER
725,643,351(2)
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
669,801,862 shares of common stock(1)
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ?
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5(a))
57%(3)
14
TYPE OF REPORTING PERSON
CO
(1) Includes 9,130,435 of the Issuer’s restricted common stock issued in connection with the Modification Agreement discussed in Item 4 of this Schedule 13D owned by NextPlat, and the shares of the Issuer’s common stock issuable upon the conversion and exercise of the securities included in 3,000 units of the Issuer’s securities (each, a “Unit”) purchased by NextPlat. Each Unit consists of one share of Series B Convertible Preferred Stock (“Preferred Stock”), and one Warrant (“Warrant”) to purchase one share of Preferred Stock. Each share of Preferred Stock votes as a class with the common stock of Progressive Care at a ratio of 100,000 votes per share of Preferred Stock. Likewise, each share of Series B Preferred Stock can be converted at any time into 100,000 shares of Progressive common stock. In addition, under a Secured Convertible Promissory Note (the “Note”) issued by the Issuer, NextPlat has the right to convert its portion of the note to the Issuer’s common stock at any time. Based on NextPlat’s portion of the current principal and interest outstanding under the Note, NextPlat could convert its portion of the note into 60,671,427 shares of Issuer’s common stock.
(2) Charles M. Fernandez, the Chairman and Chief Executive Officer of NextPlat, owns 3,652,174 shares of Issuer’s restricted common stock issued in connection with the Modification Agreement discussed in Item 4 of this Schedule 13D and his portion of the Note would convert to 24,268,571 additional shares based his portion of accrued and unpaid principal and interest under the Note at this time. In addition, Rodney Barreto, a member of NextPlat’s Board of Directors, owns 3,652,174 shares of Issuer’s restricted common stock issued in connection with the Modification Agreement discussed in Item 4 of this Schedule 13D and his portion of the Note would convert to 24,268,571 additional shares based his portion of accrued and unpaid principal and interest under the Note at this time. Messrs. Fernandez and Barreto expressly disclaim ownership of NextPlat’s shares of Issuer’s common stock.
(3) Based on 548,962,587 shares of Common Stock outstanding as of August 8, 2022, as reported in the Issuer’s Quarterly Report on Form 10-Q filed on August 8, 2022.
CUSIP No. 74332G108 SCHEDULE 13D Page 2 of 8 Pages
1
NAME OF REPORTING PERSONS
Charles M. Fernandez
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ?
(b) ?
3 SEC USE ONLY
4
SOURCE OF FUNDS
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ?
6
CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH 7
SOLE VOTING POWER
27,920,745(1)
8
SHARED VOTING POWER
697,722,606(2)
9
SOLE DISPOSITIVE POWER
27,920,745 (1)
10
SHARED DISPOSITIVE POWER
697,722,606(2)
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
27,920,745 (1)
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ?
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5(a))
2%(3)
14
TYPE OF REPORTING PERSON
IN
(1) Charles M. Fernandez owns 3,652,174 shares of Issuer’s restricted common stock issued in connection with the Modification Agreement discussed in Item 4 of this Schedule 13D and his portion of the Note would convert to 24,268,571 additional shares based his portion of accrued and unpaid principal and interest under the Note at this time.
(2) Charles M. Fernandez is the Chairman and Chief Executive Officer of NextPlat. NextPlat also owns 9,130,435 of the Issuer’s restricted common stock issued in connection with the Modification Agreement discussed in Item 4 of this Schedule 13D and 3,000 Units. Each Unit consists of one share Preferred Stock and one Warrant. Each share of Preferred Stock votes as a class with the common stock of Progressive Care at a ratio of 100,000 votes per share of Preferred Stock. Likewise, each share of Series B Preferred Stock can be converted at any time into 100,000 shares of Progressive common stock. In addition, under the Note, NextPlat has the right to convert its portion of the note to the Issuer’s common stock at any time. Based on NextPlat’s portion of the current principal and interest outstanding under the Note, NextPlat could convert its portion of the note into 60,671,427 shares of Issuer’s common stock. Mr. Fernandez expressly disclaims ownership of NextPlat’s shares of Issuer’s common stock.
(3) Based on 548,962,587 shares of Common Stock outstanding as of August 8, 2022, as reported in the Issuer’s Quarterly Report on Form 10-Q filed on August 8, 2022.
CUSIP No. 74332G108 SCHEDULE 13D Page 3 of 8 Pages
1
NAME OF REPORTING PERSONS
Rodney Barreto
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ?
(b) ?
3 SEC USE ONLY
4
SOURCE OF FUNDS
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ?
6
CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH 7
SOLE VOTING POWER
27,920,745 (1)
8
SHARED VOTING POWER
697,722,606(2)
9
SOLE DISPOSITIVE POWER
27,920,745(1)
10
SHARED DISPOSITIVE POWER
697,722,606(2)
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
27,920,745 (1)
12
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
?
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5(a))
2%(3)
14
TYPE OF REPORTING PERSON
IN
(1) Rodney Barreto owns 3,652,174 shares of Issuer’s restricted common stock issued in connection with the Modification Agreement discussed in Item 4 of this Schedule 13D and his portion of the Note would convert to 24,268,571 additional shares based his portion of accrued and unpaid principal and interest under the Note at this time.
(2) Rodney Baretto is a member of the Board of Directors of of NextPlat. NextPlat also owns 9,130,435 of the Issuer’s restricted common stock issued in connection with the Modification Agreement discussed in Item 4 of this Schedule 13D and 3,000 Units. Each Unit consists of one share Preferred Stock and one Warrant. Each share of Preferred Stock votes as a class with the common stock of Progressive Care at a ratio of 100,000 votes per share of Preferred Stock. Likewise, each share of Series B Preferred Stock can be converted at any time into 100,000 shares of Progressive common stock. In addition, under the Note, NextPlat has the right to convert its portion of the note to the Issuer’s common stock at any time. Based on NextPlat’s portion of the current principal and interest outstanding under the Note, NextPlat could convert its portion of the note into 60,671,427 shares of Issuer’s common stock. Mr. Barreto expressly disclaims ownership of NextPlat’s shares of Issuer’s common stock.
(3) Based on 548,962,587 shares of Common Stock outstanding as of August 8, 2022, as reported in the Issuer’s Quarterly Report on Form 10-Q filed on August 8, 2022.
CUSIP No. 74332G108 SCHEDULE 13D Page 4 of 8 Pages
Item 1. Security and Issuer.
This statement on Schedule 13D (the “Schedule 13D”) relates to the common stock, par value $0.0001 per share (“Common Stock”), of Progressive Care Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at 400 Ansin Blvd, Suite A, Hallandale Beach, Florida 33009.
Item 2. Identity and Background.
(a) This Schedule 13D is filed by NextPlat Corp (“NextPlat”), Charles M. Fernandez, and Rodney Barreto (each a “Reporting Person”, and together the “Reporting Persons”).
(b) The principal business address of the Reporting Persons is 3250 Mary St., Suite 410, Coconut Grove, FL 33133.
(c) NextPlat is developing a state-of-the-art e-commerce platform to collaborate with businesses to optimize their ability to sell their goods online, domestically, and internationally, and to enable customers and partners to optimize their e-commerce presence and revenue, which it expects will become the focus of its business in the future. Historically, the business of NextPlat has been the provision of a comprehensive array of Satellite Industry communication services, and related equipment sales. NextPlat operates two main e-commerce websites as well as 25 third-party e-commerce storefronts such as Alibaba, Amazon and Walmart. These e-commerce venues form an effective global network serving thousands of consumers, enterprises, and governments. NextPlat has announced its intention to broaden its e-commerce platform and is implementing comprehensive systems upgrade to support this initiative. The Company has also begun the design and development of a next generation platform for digital assets built for Web3 (an internet service built using decentralized blockchains).
Mr. Charles M. Fernandez is the Chairman of the Board and Chief Executive Officer of NextPlat. Over the past 30 years, Mr. Fernandez has successfully identified profitable start-up and dislocation opportunities, and built significant shareholder value, executing both private and public dispositions. Mr. Fernandez’s expertise in technology and healthcare includes co-founding Lakeview Health Systems (acquired by a private equity firm for approximately $70 million) and Continucare Corporation (acquired by Metropolitan Health Networks, Inc. for approximately $400 million) where he served as chairman, president and CEO. He also served as an investor, director, and Chairman of the Audit Committee of IVAX Corporation for nearly a decade prior to its purchase by Teva Pharmaceuticals for $8.7 billion.
Mr. Rodney Barreto is a member of the Board of Directors of NextPlat. Mr. Barreto is President and CEO of the Barreto Group and of Barreto Hospitality since their founding. The Barreto Group, which was founded in 1988, is a diversified company specializing in corporate and public affairs consulting, real estate investment, and development. Barreto Hospitality, which was founded in 2020, is the food, beverage, and hospitality arm of the Company boasting a wide array of dining and entertainment venues across South Florida. Mr. Barreto is also the founding partner of Floridian Partners, LLC. Floridian Partners LLC, which was founded in 2000, is a consulting firm that develops and manages effective corporate and public affairs strategies designed to achieve specific business results. Mr. Barreto has also served as the CEO of Barreto Capital, LLC, a private money lender, since November 2018. Mr. Barreto has chaired the Super Bowl Host Committee a record three (3) times, in the years 2007, 2010 and 2020. Mr. Barreto was appointed to serve as a director of the Company based on his significant leadership and entrepreneurial experience.
(d) During the last five years, none of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
CUSIP No. 74332G108 SCHEDULE 13D Page 5 of 8 Pages
(e) During the last five years, none of the Reporting Person have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgement, decree or final order enjoining future violations of or prohibiting or mandating activities subject to, federal or state securities laws or finding violation with respect to such laws.
(f) NextPlat is a Nevada corporation, having its executive offices in Florida. Messrs. Fernandez and Barreto are citizens of Florida.
Item 3. Source and Amount of Funds or Other Consideration.
Funds for the purchase of securities reported herein were derived from the available working capital of NextPlat and from the personal funds of each of Messrs. Fernandez and Barreto. The Reporting Persons purchased the securities of the Issuer that are the subject of this Schedule 13D pursuant to a Recapitalization Plan described in Item 4 below.
NextPlat purchased 3,000 units (the “Units”) of Progressive Care Inc. (the “Issuer”) for a total of $6,000,000. Each Unit consisted of one share of the Issuer’s Series B Preferred Stock and one warrant (each, a “B Warrant”) to purchase one share of the Issuer’s Series B Preferred Stock. The Preferred Stock votes as a class with the Common Stock, has 100,000 votes per share, and each share is convertible into 100,000 shares of the Issuer’s Common Stock. The Preferred Stock has a liquidation preference of $2,000 per share and a dividend preference, and is convertible into shares of the Issuer’s Common Stock at a $0.02 per share conversion price. The Series B Preferred stock automatically converts into 100,000 shares of the Issuer’s Common Stock on the date that the Issuer’s authorized number of shares of Common Stock is increased to a number sufficient to allow for their conversion. The B Warrants afford the holder the right to purchase one share of the Issuer’s Series B Preferred Stock at a price per share of $2,000.
NextPlat, Charles M. Fernandez, Rodney Barreto, and certain other investors, purchased a convertible note issued by the Issuer to an unrelated party. The note represents aggregate indebtedness of $2,790,885.63 and was purchased for aggregate consideration of $2,300,000. In connection with the acquisition of the convertible note the purchasers including the Reporting Person, entered into a certain Debt Modification Agreement, dated August 30, 2022 (the “Modification Agreement”) with the Issuer pursuant to which the maturity of the convertible note was extended, the interest rate was reduced, the variable conversion feature was eliminated and a fixed conversion price of $0.02 was adopted. In consideration of those concessions, 21,000,000 shares of Common Stock of the Issuer were issued to the purchasers. NextPlat, Charles M. Fernandez and Rodney Barreto, purchased $1,213,428.53, $485,371.41, and $485,371.41, respectively, in outstanding balance of the note for purchase price of $1 million, $400,000, and $400,000, respectively, which represent the beneficial ownership in 60,671,427, 24,268,571, and 24,268,571 shares of Common Stock of the Issuer, respectively, based upon the outstanding balance of the convertible note; and in addition NextPlat, Charles M. Fernandez and Rodney Barreto, received from the Issuer 9,130,435, 3,652,174, and 3,652,174 shares of restricted Common Stock of the Issuer, respectively, pursuant to the Modification Agreement discussed in Item 4 below.
Item 4.
Purpose of Transaction.
The Reporting Persons acquired their positions in the securities that are the subject of this Schedule 13D (i) in the belief that the securities are undervalued, and (ii) because the Reporting Persons believe that a strategic investment by NextPlat in the Issuer represents substantial business opportunities for the Issuer and for NextPlat with the promise of increasing the market value of both the Issuer’s securities and NextPlat’s securities. It is anticipated that NextPlat’s management team and select members of its Board of Directors, including Reporting Persons Charles M. Fernandez and Rodney Barreto will provide the Issuer with their experience in healthcare and digital technology including the development of new healthcare and lifestyle products, and it is anticipated that the Issuer’s products will be sold via NextPlat’s global e-commerce marketplaces. As part of this transaction, Mr. Fernandez will be appointed as Chairman of the Board of Directors of the Issuer, replacing Alan Jay Weisberg who will step down from his current positions to assume the new roles of Vice Chairman and Chief Executive Officer of the Issuer. Mr. Barreto will also be joining the Issuer’s Board of Directors as Vice Chairman. The Issuer intends to utilize a portion of the capital invested by the Reporting Persons to further fund deployment of its digital platforms and the development and sale of new health, fitness, and beauty products.
CUSIP No. 74332G108 SCHEDULE 13D Page 6 of 8 Pages
The Reporting Persons intend to have discussions with other stockholders of the Issuer, as well as other interested parties and possibly representatives of the Issuer, as they continue to evaluate the situation.
The Reporting Persons are considering all their options and, while they have no present plan to do so, they reserve the right and are considering whether to propose other transactions that relate to or would result in one or more of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.
The Reporting Persons may, from time to time and at any time: (i) acquire additional equity, debt, notes, instruments or other securities of the Issuer and/or its affiliates (collectively, “Securities”) in the open market or otherwise; (ii) dispose of any or all of their Securities in the open market or otherwise; or (iii) engage in any hedging or similar transactions with respect to the Securities.
Recapitalization Plan
Under the recapitalization plan, NextPlat, Charles M. Fernandez, individually, and Rodney Barreto, individually, and certain other investors (together the “Purchasers”) invested an aggregate of $8.3 million into securities of the Issuer. Pursuant to the terms of the Securities Purchase Agreement, dated August 30, 2022 (the “Purchase Agreement”), between the Issuer and NextPlat, NextPlat purchased 3,000 units (the “Units”) from the Issuer. Each Unit consists of one share of Preferred Stock of the Issuer and one B Warrant to purchase one share of the Issuer’s Series B Preferred Stockfor an aggregate purchase price of $6,000,000, or $2,000 per Unit. In addition, certain persons including the Reporting Persons purchased a convertible note issued by the Issuer and owned by an unaffiliated person for an aggregate purchase price of $2,300,000. In connection with the acquisition of the convertible note the purchasers including the Reporting Person, entered into the Modification Agreement with the Issuer pursuant to which the maturity of the convertible note was extended, the interest rate was reduced, the variable conversion feature was eliminated and a fixed conversion price of $0.02 was adopted. In consideration of those concessions, 21,000,000 shares of Common Stock of the Issuer were issued to the purchasers. NextPlat, Charles M. Fernandez and Rodney Barreto, purchased $1,213,428.53, $485,371.41, and $485,371.41, respectively, in outstanding balance of the note for purchase price of $1 million, $400,000, and $400,000, respectively. Pursuant to the Modification Agreement, the convertible note will automatically convert into shares of the Issuer’s Common Stock on the later of the on the date that the Issuer’s authorized number of shares of Common Stock is increased to a number sufficient to allow for their conversion and the date that the Issuer’s Common Stock commences trading on a national securities exchange.
B Warrants
Each B Warrant entitles the registered holder to purchase one share of Preferred Stock at a price of $2,000 per share, subject to adjustment as described therein, at any time commencing: (i) at any time or times on or after the initial exercise date and (ii) on or before the expiration of five years from the date of issue. The B Warrants contain cashless exercise provisions.
Registration Rights
Pursuant to the Registration Rights Agreement, dated as of September 2, 2022 (the “Registration Rights Agreement”), to which the Issuer, and NextPlat are parties, NextPlat is entitled to demand and “piggy-back” registration rights with respect to the shares of the Issuer’s Common Stock then issued or issuable upon conversion of the Series B Preferred Stock, and shares of the Issuer’s Common Stock then issued or issuable upon the exercise or cashless conversion of the B Warrants, , including any securities issued as a stock split, dividend or other distribution with respect to or in exchange for or in replacement of such securities.
CUSIP No. 74332G108 SCHEDULE 13D Page 7 of 8 Pages
The foregoing summary of certain terms of the Purchase Agreement, the Note Purchase Agreement, the Modification Agreement, and the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the documents, which are incorporated by reference as Exhibits 1-3 to this Schedule 13D.
Except as set forth herein, none of the Reporting Persons has any present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Each of the Reporting Persons intends to review the Reporting Person’s investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position and strategic direction, actions taken by the board of directors, price levels of the Common Stock, other investment opportunities available to the Reporting Person, conditions in the securities market and general economic and industry conditions, the Reporting Person may in the future take such actions with respect to the Reporting Person’s investment in the Issuer as they deem appropriate including, without limitation, purchasing additional Common Stock or selling some or all of their Common Stock and, alone or with others, pursuing discussions with the management, the Board of Directors, other stockholders of the Issuer and third parties with regard to their investment in the Issuer, and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As described in Item 4, the Reporting Persons may be deemed the beneficial owner of 725,643,351 shares of Common Stock, in each case directly held by the Reporting Persons, representing approximately 57% of the outstanding units.
The aggregate percentage of Common Stock beneficially owned by the Reporting Persons is calculated based upon 548,962,587 shares of Common Stock, as reported by the Issuer in its Form 10-Q file number 000-52684.
(b) By virtue of their personal investments in the Issuer, Messrs. Fernandez and Barreto have the power to (i) vote or direct the voting and (ii) dispose or direct the disposition of 725,643,351 and 27,920,745 shares of Common Stock, respectively.
(c) Other than the transactions described in Items 3 and 4 above, the Reporting Persons have not effected any transactions in the Common Stock in the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
Other than the agreements described in Item 4 and relationships described in Item 2, as of the date hereof, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Company.
Item 7. Material to be Filed as Exhibits.
1 Securities Purchase Agreement, dated August 30, 2022, among Progressive Care and the Company*
2 Debt Modification Agreement, dated August 30, 2022, among Progressive Care, the Company, Charles M. Fernandez, Rodney Barreto, Daniyel Erdberg, and Sixth Borough Capital Fund, LP*
3 Confidential Note Purchase Agreement, dated August 30, 2022, among the Company, Progressive Care, Iliad Research and Trading, L.P., PharmCo, L.L.C., Charles M. Fernandez, Rodney Barreto, Daniyel Erdberg, and Sixth Borough Capital Fund, LP
4 Joint Filing Agreement, dated as of September 8, 2022, among the Reporting Persons*
* Filed herewith.
CUSIP No. 74332G108 SCHEDULE 13D Page 8 of 8 Pages
SIGNATURES
After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Date: September 8, 2022
NextPlat Corp.
By: /s/ Charles M. Fernandez
Name:
Charles M. Fernandez
Title: Chairman and Chief Executive Officer
/s/ Charles M. Fernandez
Charles M. Fernandez
/s/ Rodney Barreto
Rodney Barreto
I would say Jay is not Warren Bufffet.
SUPPLEMENTAL INFORMATION AND DISCLOSURE STATEMENT THE SUSTAINABLE GREEN TEAM, LTD.
A Delaware Corporation
24-200 County Road Astatula, FL 34705
Telephone: (407) 886-8733
Corporate Website: www.thesustainablegreenteam.com Corporation Email: info@nationalarborcare.com
________________________________ SIC - 0783
Trading Symbol: SGTM
OTC Pink Supplemental Disclosure– Current Reporting of Material Corporate Events Entry Into a Material Definitive Agreement
As reported by The Sustainable Green Team, Ltd. (the “Company”) in its Financial Statements and Notes for the fiscal quarter ended July 2, 2022, which were uploaded to OTC Markets on August 22, 2022, on August 9, 2022, the Company entered into a restricted sub- license agreement (the “Agreement”) with an innovative soil technology company, VRM Global Holdings Pty Ltd, and its wholly owned subsidiary VRM International PTY LTD (referred to herein together as the “Licensor”). Pursuant to the Agreement, the Licensor agreed to grant the Company a restricted sub-license (the “Sub-License”), pursuant to which the Licensor will allow the Company to use certain rights and entitlements as identified in the Agreement and provide the Company with certain products as identified in the Agreement, and referred to therein as the inputs, which will allow the Company to manufacture soil products from its existing and future fiber products.
Pursuant to the Agreement, in consideration of the grant of the Sub-License, the Company agreed to issue to the Licensor, 500,000 shares of its common stock simultaneously with the execution of the Agreement. Additionally, in consideration of the grant of the Sub- License, the Company agreed to make to the Licensor, two (2) cash payments of $500,000 each, conditioned on the Company reaching a certain milestone, and if reached, to be paid with the first payment due upon the achievement of such milestone within the calendar year 2022 and the second payment due on the one (1) year anniversary of the first payment.
The Term of the Agreement is for a period of five (5) years. Pursuant to the Agreement, if the milestone is not achieved and the initial cash payment is not made by February 4, 2023, the
Licensor may in its sole discretion terminate the Agreement. The Agreement can also be terminated at any time by the written agreement of the parties.
For additional information regarding the Licensor, please refer to their website at: https://
www.vrmbiologik.com/. Please note that the information contained on, or accessible through, the foregoing website is not a part of, and is not incorporated by reference into, this Supplemental Information and Disclosure Statement.
The entry into the Agreement, as well as the activities contemplated thereby, did not and do not, constitute a change in control, as the Company’s largest shareholder remains unchanged and no other person became the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities. Additionally, there was no change in the composition of the Company’s board of directors and nor was there any change to the officers of the Company. Accordingly, there was no change in control of the Company.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This disclosure statement contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward- looking terminology such as “may,” “will,” “should,” “potential,” “plan,” “intend,” “expect,” “outlook,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, or state other forward-looking information. Our ability to predict future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, actual outcomes could differ materially from those set forth or anticipated in our forward-looking statements. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this disclosure statement. Furthermore, except as required by law, we are under no duty to, and do not intend to, update any of our forward-looking statements after the date of this disclosure statement, whether as a result of new information, future events or otherwise.
The Sustainable Green Team, Ltd.
Date: September 6, 2022 Signature: /s/ Anthony J. Raynor Name: Anthony J. Raynor
Title: Chief Executive Officer
Well RXMD has crossed over the 50 DMA, let’s see if they can hold that as a support level.
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Progressive Care Announces Completion of Strategic Transaction with NextPlat
See on website
MIAMI, FL – September 6, 2022 – Progressive Care Inc. (OTCQB:RXMD) (“Progressive Care” or the “Company”), a personalized healthcare services and technology company, is excited to announce that it has successfully completed a recapitalization of its debt and a strategic investment by NextPlat Corp. (“NextPlat”) (NASDAQ:NXPL). Dawson James Securities Inc. (“Dawson”) served as the placement agent for this transaction.
Under the agreement, Progressive Care received an aggregate gross proceeds of $6 million from NextPlat in exchange for the issuance to NextPlat of 3,000 units of Series B Preferred Stock as well as warrants to purchase up to 3,000 shares of Series B Preferred Stock at an exercise price of $2,000 per share. In addition, NextPlat, NextPlat’s Executive Chairman and CEO, Charles M. Fernandez, board member, Rodney Barreto, and certain other investors purchased approximately $2.8 million of outstanding convertible debt in Progressive Care. Progressive Care and the other purchasers of the debt agreed to modify the debt so as to fix the conversion price of the debt at $0.02 per share, to reduce the interest rate from 10% to 5% per annum, and to extend the maturity date to August 31, 2027.
In addition, Charles Fernandez, NextPlat’s CEO and Chairman of the Board will be appointed as the Chairman of Progressive Care’s Board of Directors joined by Rodney Barreto, Director of NextPlat, as Co-Vice-Chairman. Alan Jay Weisberg, CEO, and Chairman of the Board of Progressive Care, will assume the position of Co-Vice-Chairman of the Board while continuing to serve as the CEO of the company.
“Today marks an incredibly exciting day in Progressive Care’s history. At a transformational time for the healthcare industry, the successful completion of the strategic transaction makes our company’s balance sheet stronger and will enable us to capitalize on significant opportunities for growth. We are now positioned to leverage our infrastructure, expand, and diversify our services while building our distribution capabilities across the country. We welcome Charlie and Rodney to our leadership team and are excited to partner with NextPlat to help enhance the digital transformation of Progressive Care business into a market leader in medication therapy management, remote patient monitoring, and e-health" said Alan Jay Weisberg, CEO of Progressive Care Inc.
Charles M. Fernandez, CEO and Chairman of NextPlat said, “I am extremely excited about the future of Progressive Care and NextPlat partnership. This much-needed recapitalization, and our team’s unique abilities to innovate and develop leading-edge technologies will help the company grow faster, meeting the needs of the complex healthcare space. Together, we will continue to reinforce our dedication to patients, providers, and technologies that will deliver improved customer service, cost savings and enhanced outcomes for patients nationwide. I would like to thank both teams for their efforts in getting us to successful completion of the transaction and looking forward to working together towards the stellar growth ahead.”
Rodney Barreto, NextPlat Director added, “The coming together of NextPlat and Progressive is a powerful combination. Our technologies and resources will bring meaningful improvement for Floridians and healthcare system countrywide by significantly improving patient care and management systems. I am excited to be a part of this process.”
Lucosky Brookman served as counsel to Progressive Care in connection with the transaction, and ArentFox Schiff LLP served as counsel to NextPlat.
For more information about Progressive Care, please visit the Company’s website. Connect and stay in touch with us on social media:
Progressive Care Inc.
Progressivecareus.com
PharmcoRx Pharmacy
Pharmcorx.com
ClearmetrX
Clearmetrx.com
About Progressive Care
Progressive Care Inc. (OTCQB: RXMD), through its subsidiaries, is a Florida health services organization and provider of prescription pharmaceuticals, compounded medications, provider of tele-pharmacy services, the sale of anti-retroviral medications, medication therapy management (MTM), the supply of prescription medications to long-term care facilities, and health practice risk management.
About NextPlat
NextPlat is a global e-commerce platform company created to capitalize on multiple high-growth sectors and markets for physical and digital assets. The Company intends to collaborate with businesses, optimizing their ability to sell their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and revenue. NextPlat currently operates an e-commerce communications services division through its Global Telesat Communications Ltd and Orbital Satcom Corp business units that offer voice, data, tracking, and IoT services to customers worldwide through multiple global storefronts.
Cautionary Statement Regarding Forward-Looking Statements Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company’s expectations about its future operating results, performance, and opportunities that involve
substantial risks and uncertainties. These statements include but are not limited to statements regarding departure of the company’s CEO. When used herein, the words “anticipate,” “believe,” “estimate,” “upcoming,” “plan,” “target,” “intend” and “expect” and similar expressions, as they relate to Progressive Care Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
Public Relations Contact:
Carlos Rangel
carlosr@pharmcorx.com
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It was all Market Maker trades.
Also McBride assumed the role of CEO today yet no SEC filings, so beware of rumors on social media.
I’ll definitely be holding my 2 million shares awhile longer.
I will provide shareholder updates as soon as material events are determined.”
Very evasive remark!
Sounds to me like Gallagher milked this company as much as he can , now it’s McBride’s turn to see what he can get out of this. I’m still waiting on the Attorney Letter that he promised us 9 months ago and then went dark leaving everyone hanging.
They definitely put their money where their mouth is. Let’s see how successful they can make this partnership. Maybe 1 billion in revenues is not too far off.
Can one of the Mods post this to the sticky please!
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OTC DISCLOSURE & NEWS SERVICE
Progressive Care Enters into an Agreement with NextPlat for Significant Strategic Investment and Debt Restructuring
Press Release | 08/31/2022
MIAMI, FL, Aug. 31, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire -- Progressive Care Inc. (OTCQB:RXMD) (“Progressive Care” or the “Company”), a personalized healthcare services and technology company, is excited to announce that it has entered into an agreement for a recapitalization of its current debt and a strategic investment by NextPlat Corp. (NASDAQ: NXPL) (“NextPlat”).
Under the agreement, Progressive Care will receive an aggregate of $6 million from NextPlat in exchange for the issuance to NextPlat of 3,000 units of Series B Preferred Stock as well as warrants to purchase up to 3,000 shares of Series B Preferred Stock at an exercise price of $2,000 per share. In addition, NextPlat’s Executive Chairman and CEO, Charles M. Fernandez, board member, Rodney Barreto, and certain other investors will purchase approximately $2.8 million of outstanding convertible debt in Progressive Care at an agreed fixed conversion price of $0.02 per share. Progressive Care and NextPlat agreed to reduce the interest rate on the purchased debt from 10% to 5% per annum and extend the maturity date to August 30, 2027.
NextPlat’s management team and select members of its Board of Directors will provide Progressive Care with their market-proven experience in healthcare and digital technology including the development of new healthcare and lifestyle products to be sold via NextPlat’s global e-commerce marketplaces. As part of this transaction, Mr. Fernandez will be appointed as Chairman of Progressive Care’s Board of Directors (the “Board”) replacing Alan Jay Weisberg who will step down from this position to assume the new role of Vice Chairman, remaining on the Board, while also continuing to serve as Progressive Care’s CEO. Mr. Barreto will also be joining the Board as Vice Chairman. Dawson James Securities Inc. (“Dawson”) served as the placement agent for this transaction. Progressive Care intends to utilize a portion of the growth capital to further fund the deployment of its digital platforms and the development and sale of new health, fitness, and beauty products.
Over the past 30 years, Mr. Fernandez has successfully identified profitable start-up and dislocation opportunities, and built significant shareholder value, executing both private and public exits. Mr. Fernandez’s expertise in technology and healthcare includes co-founding Lakeview Health Systems (acquired by a private equity firm for approximately $70 million) and Continucare Corporation (acquired by Metropolitan Health Networks, Inc. for approximately $400 million) where he served as chairman, president and CEO. He also served as an investor, director, and Chairman of the Audit Committee of IVAX Corporation for nearly a decade prior to its purchase by Teva Pharmaceuticals for $8.7 billion.
Charles M. Fernandez said, ”Progressive Care has built a vibrant and rapidly growing healthcare services and technology company currently serving tens of thousands of customers who rely on its PharmcoRx platform and services every day. As a technology and healthcare entrepreneur, I see tremendous value in Progressive Care’s capabilities which is why I am personally investing alongside NextPlat. I believe we can leverage our expertise, industry know-how, and global e-commerce platforms to accelerate their continued growth domestically as well as internationally. As long-term investors, we are committed to harnessing the power of digital technologies including Web3, to capitalize on the ongoing digital transformation of Progressive Care and the entire healthcare industry.”
Alan Jay Weisberg commented, “Progressive Care has pursued a vision of being able to transform the healthcare industry by creating data-driven tools and technology. Charlie and the team at NextPlat have extensive knowledge and experience in utilizing digital technology and we believe will help Progressive Care build significant value for all stakeholders including patients, payors, practitioners, and investors. We are excited to have this team of industry leaders as our new long-term investors and partners, and look forward to working together to advance our vision for modern healthcare.”
For more information about Progressive Care, please visit the Company’s website. Connect and stay in touch with us on social media:
Progressive Care Inc.
Progressivecareus.com
PharmCoRx Pharmacy
Pharmcorx.com
ClearMetrx
Clearmetrx.com
About Progressive Care
Progressive Care Inc. (OTCQB: RXMD), through its subsidiaries, is a Florida health services organization and provider of prescription pharmaceuticals, compounded medications, provider of tele-pharmacy services, the sale of anti-retroviral medications, medication therapy management (MTM), the supply of prescription medications to long-term care facilities, and health practice risk management.
About NextPlat
NextPlat is a global e-commerce platform company created to capitalize on multiple high-growth sectors and markets for physical and digital assets. The Company intends to collaborate with businesses, optimizing their ability to sell their goods online, domestically, and internationally, and enabling customers and partners to optimize their e-commerce presence and revenue. NextPlat currently operates an e-commerce communications services division through its Global Telesat Communications Ltd and Orbital Satcom Corp business units that offer voice, data, tracking, and IoT services to customers worldwide through multiple global storefronts.
Cautionary Statement Regarding Forward-Looking Statements Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company’s expectations about its future operating results, performance, and opportunities that involve substantial risks and uncertainties. These statements include but are not limited to statements regarding departure of the company’s CEO. When used herein, the words “anticipate,” “believe,” “estimate,” “upcoming,” “plan,” “target,” “intend” and “expect” and similar expressions, as they relate to Progressive Care Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
Public Relations Contact:
Carlos Rangel
carlosr@pharmcorx.com
It was a post to another board. Sorry for the confusion.
Correct.
Sorry, wrong post.
Company has been in a quiet period, preparing for uplist.
Try a different news feed. News is out everywhere.
Already paid off.
A Florida Corporation (855) 998-7337
For the Three and Six Months Ended June 30, 2022
Prepared in accordance with OTC Pink Basic Disclosure Guidelines
TABLE OF CONTENTS
Page
Forward Looking Statements 3
Organizational Structure 3
Business Development 3
Management 3
Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 5
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 6
Consolidated Statement of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021 7
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 8
Notes to the Consolidated Financial Statements 9
OTC Pink Basic Disclosures 13
Signatures 19
Forward Looking Statements
This Annual Report contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Statements made herein that may be considered forward-looking include statements incorporating terms such as "expects," "believes," "intends," "anticipates" and similar terms that relate to future events, performance, or results of Curtis Mathes Corporation, a Florida corporation (the “Company”), including, without limitation, statements made regarding the forecast for various Original Equipment Manufacturer (“OEM”) market contracts and expected future results. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from management's present expectations or projections. These risks and uncertainties include, but are not limited to, customer and supplier relationships; prices; competition; ability to realize anticipated benefits from initiatives taken; market demand; litigation and other liabilities; and economic, political, governmental, and technological factors affecting the Company's operations, tax rate, markets, products, services, and prices, among others.
Organizational Structure
Curtis Mathes Corporation f/k/a Light Engine Design Corp., a Florida corporation (OTC: CMCZ) (the “Company”), has acquired Curtis Mathes, Inc., a Texas corporation. The Company’s current operating subsidiaries are Curtis Mathes Grow Lights, Inc. (formerly Tall Trees LED Company), Curtis Mathes Therapeutics, Inc. (formerly Curtis Mathes, Inc.), and Curtis Mathes International LLC, as wholly- owned subsidiaries. The primary business focus for the Company is the research, development, manufacturing, and sales of what the Company believes to be groundbreaking Solid-State Lighting (“SSL”). The Company expects to apply these technologies to Light Emitting Diodes (“LEDs”), lasers, and other light sources, for use in the general indoor and outdoor lighting, horticultural and other frequency-specific lighting markets.
Business Development
The Company has shifted its’ focus to the horticultural lighting and lighting therapy markets.
Management
Robert (Bob) Manes –Chairman/CEO/COO/Director/Founder
• Previous owner, Tall Trees LED Company
• Solid-State lighting designer
• 30-year business veteran
• 19 years in Solid-State Lighting (SSL)
• BS in Computer Management Information Systems, minor in Aviation
• Master of Business Administration (MBA)
Dr. Zacariah (Zac) Hildenbrand, Ph.D. – President and Chief Scientific Officer/Director
• Ph.D. in Biochemistry
• Doctoral research focused on the molecular architecture involved in hormone-dependent cancers.
• Post-doctoral research fellow at the University of Texas Southwestern Medical Center in Dallas
• Contributed to the development of a novel therapy for the treatment of chronic myeloid leukemia; a blood-borne cancer that
afflicts children
• Nominated for the Humanity in Science Award
Michael Martini – Chief Financial Officer/Director
• B.S. Accounting Eastern Kentucky University
• Registered Certified Public Accountant since 2007
• President, Martini Sports Management, Major League Baseball Certified Agent
• Director, Treasurer John Daly Major Ed Foundation
• Director SixtyFeetSix Foundation
3
Derek Enloe – Chief Revenue Officer/Director
• B.S. Entrepreneurship/Marketing Oklahoma State University
• Director, Enloe and Associates Insurance Agency
• Owner, Enloe and Associates UHaul and rentals
• Serial entrepreneur, developed and sold numerous businesses, agencies and properties
• Real estate investor
• Executive team builder
James Milam – Chief Sales Officer/Director
• BBA - Eastern Kentucky University
• NCAA Collegiate Athletics - Golf (1997-2000)
• Large technical sales teams leader
• Technical marketing expert
• New market and revenue streams identification and development
4
CURTIS MATHES CORP. UNAUDITED CONSOLIDATED BALANCE SHEETS
ASSETS
2021
6,413 245 3,500 6,147
16,305
15,437 870,314 750,000
1,652,056
287,764 227,484
515,248
150,000
665,248
-
105,673 2,482,800 -
(1,601,665)
986,808
1,652,056
June 30,
2022
December 31,
Current Assets
Cash and cash equivalents
Accounts receivable
Prepaids 3,500 Inventory 6,165
Total current assets 10,590
Customer financing agreements 15,087 Goodwill 870,314
Intangible assets
Total Assets
Current Liabilities
LIABILITIES AND STOCKHOLDERS' EQUITY
750,000
$ 1,645,991
$ 397,625 227,484
625,109
150,000
775,109
-
105,673 2,482,800 30,000
(1,747,591)
870,882
$ 1,645,991
$
680 245
$
$
$
Accounts payable and accrued liabilities Notes payable - related party
Total current liabilities
Long Term Liabilities
Long term notes payable
Total Liabilities
Commitments and contingencies
Stockholders' Equity
Common stock, $0.001 par value, 150,000,000 shares authorized having a par value of $0.001 per share; 105,672,622 shares issued and oustanding as of June 30, 2022 and
and December 31, 2021
Additional paid-in capital Subscriptions Payable Accumulated deficit
Total Stockholders' Equity
Ttoal Liabilities and Stockholders' Equity
$
The accompanying notes are an integral part of these consolidated financial statements.
5
CURTIS MATHES CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
26,120 15,095
11,025
76,777 240 55,096
132,113 (121,088)
- - -
(121,088)
-
2022
1,100 169 931
14,732 45 125,600
140,377 (139,446)
(2,774) (3,706)
(6,480) (145,926)
-
(145,926)
105,672,622
(0.00)
2021
60,382 32,115 28,267
187,072 6,778 126,065
319,915
(291,648)
100 - 100
(291,548) -
(291,548)
105,672,622
(0.00)
Revenue
Revenue
Cost of goods sold
Gross Profit
Operating Expenses
General and administrative Marketing and promotion Professional and consulting fees
Total operating expenses
Loss from Operations
Other Income (Expense)
Interest income Interest expense
Total other income (expense)
Net Loss (Income) Before Income Taxes
Income Tax
Net Loss (Income) Before After Taxes
$
- - -
$
$
$
$
2,152 45 75,000
77,197
(77,197)
(2,774) (3,706) (6,480)
(83,677)
(83,677)
105,672,622
(0.00)
$
$ $
(121,088) $
105,672,622 $
(0.00) $
$
$
$
Weighted Average Number of Common Shares Outstanding - Basic and Diluted $
Gain (Loss) per Common Share - Basic and Diluted $
The accompanying notes are an integral part of these consolidated financial statements.
6
Balance - March 31, 2022
Net loss
Balance - December 31, 2021
Proceeds from subscrittions Net loss
Net loss
Net loss
105,672,622
- -
105,672,622
$
- - - -
105,673 $ 2,482,800
$
30,000 -
30,000
$
- (145,926)
(1,747,591)
$
30,000 (145,926)
870,882
CURTIS MATHES CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
Additional Paid In Subscriptions Accumulated
Common Stock Common Amount Capital Payable Deficit Total
105,672,622 $ 105,673 $ 2,482,800 $ 30,000 $ (1,663,914) $ 954,559
- - - - (83,677) (83,677)
Balance -July 30, 2022 105,672,622 $ 105,673 $ 2,482,800 $ 30,000 $ (1,747,591) $ 870,882
Additional Paid In Subscriptions Accumulated
Common Stock Common Amount Capital Payable Deficit Total
$ 105,673 $ 2,482,800 $ - $ (1,601,665) $ 986,808
Balance -July 30, 2022
Additional Paid In Common Stock Common Amount Capital
Balance - March 31, 2021 105,672,622 $ 105,673 $ 2,482,800 $
Subscriptions Payable
-
$
Accumulated
Deficit Total
(1,390,847) $ 1,197,626
- - - - (121,088) (121,088)
Balance -June 30, 2021 105,672,622 $ 105,673 $ 2,482,800 $ - $ (1,511,935) $ 1,076,538
Additional Paid In Common Stock Common Amount Capital
Balance - December 31, 2020 105,672,622 $ 105,673 $ 2,482,800 $
Subscriptions Payable
-
$
Accumulated
Deficit Total
(1,220,387) $ 1,368,086
- - - - (291,548) (291,548)
Balance -June 30, 2021 105,672,622 $ 105,673 $ 2,482,800 $ - $ (1,511,935) $ 1,076,538
The accompanying notes are an integral part of these consolidated financial statements.
7
CURTIS MATHES CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
Cash Flows from Operating Activities
Net loss
Adjustments to reconcile net loss to net cash used in operating activities: Changes in operating assets and liabilities:
Prepaid expenses
Accounts receivable
Customer financing agreements Inventory
Accounts payable and accrued liabilities
Net Cash Provided by Operating Activities
Cash Flows From Investing Activities
Cash Flows From Financing Activities
Proceeds from subscriptions payable Payment of notes payable
Net Cash Provided by (Used in) Financing Activities
Net (Decrease) Increase In Cash Cash, Beginning of Period
Cash, End of Period
Supplemental Disclosures of Cash flow information:
Cash paid for interest Cash paid for income taxes
$
2022
(145,926)
-
- 350
(18) 109,861
(35,733) -
30,000 -
30,000
(5,733) 6,413 680
-
-
2021
$
(291,548)
3,500 1,077 1,941 (9,172)
(32,609)
(326,811) -
(10,000)
(10,000)
(336,811)
351,415
14,604
-
-
$
$
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
8
CURTIS MATHES CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Curtis Mathes Corp. f/k/a Light Engine Design Corp. (the “Company”) was incorporated under the name Mortgage Acquisition Group, Inc. in the State of Florida on July 7, 1997. On December 2, 2016, the Company changed its name from Tall Trees LED Company, Inc. to Light Engine Design Corp. On November 4, 2016, the Company completed the acquisition of Tall Trees LED Company (“Tall Trees”) through the issuance of 15,292,500 shares of the Company’s common stock. In conjunction with the acquisition, Robert Manes, the majority owner of Tall Trees, exchanged his ownership for 15,000,000 shares of the Company’s common stock and was appointed Chief Executive Officer, Chief Operating Officer and Chairman, and Kevin Stone, the sole owner of DLP, exchanged his ownership for 15,000,000 shares of the Company’s common stock and was appointed President, Chief Technology Officer and Director. Effective May 20, 2019, the Company acquired Curtis Mathes, Inc. and Curtis Mathes International, LLC as wholly-owned subsidiaries. The Company facilitates research and development, and manufacture of products for the solid-state lighting industries. Both acquired companies are wholly-owned subsidiaries and are consolidated in these financial statements using the equity method of accounting.
On March 18, 2020 ,Tall Trees LED Company changed its name to Curtis Mathes Grow Lights, Inc. On June 23, 2020, Curtis Mathes, Inc. changed its name to Curtis Mathes Therapeutics, Inc.
September 25, 2020, The Company changed its name from Light Engine Design Corp to Curtis Mathes Corporation and requested a stock symbol change. On June 3, 2021, the Company received approval from FINRA for its new ticker symbol CMCZ.
The Company’s principal business is to provide Light Emitting Diode (LED) lighting for frequency-specific applications, such as horticulture, phototherapy, and light-delivery and spectrum-sensitive functions, such as wildlife preservation and light pollution reduction.
Effective November 9, 2021, Paul Williams resigned as the Company’s Chief Executive Officer, Chief Financial Officer and Chairman. Effective November 23, 2021, Eric Hill resigned as the Company’s Chief Legal Officer and Secretary.
Effective December 10, 2021, Michael Martini added to Board of Directors. Serves as Chief Financial Officer
Effective December 10, 2021, Derek Enloe added to Board of Directors. Serves as Chief Revenue Officer.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts and valuations of intangible assets, among others. Actual results could differ from those estimates.
Concentrations and credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The cash balance may at times may exceed federally insured limits. Management believes the financial risk associated with these balances is minimal and has not experienced any losses to date. Company did not have cash balances in excess of FDIC limits at June 30, 2022 and December 31, 2021.
9
Risk and Uncertainties
The Company operates in an industry that is subject to rapid change and intense competition. The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks, including the potential risk of business failure.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase and money market accounts to be cash equivalents. As of June 30, 2022 and December 31, 2021, the Company had no cash equivalents and all cash amounts consisted of cash on deposit.
Accounts Receivable
Receivables are stated at the amount the Company expects to collect. The Company considers the following factors when evaluating the collectability of specific receivable balances: creditworthiness of the debtor, past transaction history with the debtor, current economic industry trends, and changes in debtor payment terms. If the financial condition of the Company’s debtors were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required.
The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Changes to the allowance for doubtful accounts made as a result of management’s determination regarding the ultimate collectability of such accounts are recognized as a charge to the Company’s earnings. Specific receivable balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to the receivable.
At June 30, 2022 and December 31, 2021, the Company has determined that all receivable balances are fully collectible and, accordingly, no allowance for doubtful accounts has been recorded.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of various payments that the Company has made in advance for goods or services to be received in the future. Prepaid expenses include service contracts and taxes paid in advance, deposits on facilities.
Revenue Recognition
The Company currently generates revenue through the sale of its LED lighting solutions. Revenue is recognized when all of the following criteria are met:
• Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of an order from the Company’s distributors, resellers or customers.
• Delivery has occurred. Delivery is deemed to have occurred when title and risk of loss has transferred, either upon shipment of products to customers or upon delivery.
• The fee is fixed or determinable. The Company assesses whether the fee is fixed or determinable based on the terms associated with the transaction.
• Collection is reasonably assured. The Company assesses collectability based on credit analysis and payment history.
Any revenue received that does not yet meet the above recognition standards is recorded to unearned revenue, and held as a liability
until recognition occurs.
Impairment of Long-Lived Assets
The Company reviews long-lived assets, at least annually, to determine if impairment has occurred and whether the economic benefit of the asset (fair value of assets to be used and fair value less disposal cost for assets to be disposed of) is expected to be less than the carrying value. Triggering events, which signal further analysis, consist of a significant decrease in the asset's market value, a substantial change in the use of an asset, a significant physical change in the asset, a significant change in the legal or business climate that could affect the asset, an accumulation of costs significantly in excess of the amount originally expected to acquire or construct the asset, or a history of losses that imply continued loss associated with assets used to generate revenue.
10
Income Taxes
Income taxes are provided in accordance with ASC 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Provision for income taxes consists of federal and state income taxes in the United States. Due to the uncertainty as to the realization of benefits from our deferred tax assets, including net operating loss carry-forwards and other tax credits, we have a full valuation allowance reserved against such assets. We expect to maintain this full valuation allowance at least in the near term.
The Company records interest and penalties related to unrecognized tax benefits in income tax expense. There were no interest or penalties related to unrecognized tax benefits for the three and six months ended June 30, 2022 and the year ended December 31, 2021.
Fair Value of Financial Instruments
The fair values of the Company’s assets and liabilities that qualify as financial instruments under FASB ASC Topic 825, “Financial Instruments,” approximate their carrying amounts presented in the accompanying financial statements at June 30, 2022 and December 31, 2021.
Loss Contingencies
The Company recognizes contingent losses that are both probable and estimable. In this context, the Company defines probability as circumstances under which events are likely to occur. In regard to legal costs, we record such costs as incurred.
Earnings per Share Policy
The basic computation of loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with ASC 260, "Earnings Per Share”. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the common stock equivalents which would arise from the exercise of stock options and warrants outstanding using the treasury stock method and the average market price per share during the period. Common stock equivalents are not included in the diluted earnings per share calculation when their effect is antidilutive.
Recent Accounting Pronouncements
Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption.
NOTE 3 – LIQUIDITY/GOING CONCERN
The Company has accumulated losses of $1,747,591, including non-cash expenses, and has sustained negative cash flows from operating activities since its acquisition of Tall Trees LED Company and Curtis Mathes, Inc. This factor raises substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Management plans to (i) raise additional capital to fund continued operations of the Company and (ii) generate profits from operations beginning in the 2013 fiscal year.
In the event the Company does not generate sufficient funds from revenues or financing through the issuance of its common stock or from debt financing, the Company will be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.
11
NOTE 4 – STOCKHOLDERS’ DEFICIT
The total number of common shares authorized that may be issued by the Company is 150,000,000 shares with a par value of $0.001 per share. As of June 30, 2022 and December 31, 2021 there were 105,672,622 shares of Common Stock issued and outstanding.
NOTE 5 – EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.
The Company has the following common stock equivalents as of June 30, 2022 and December 31, 2021:
As of June 30, 2022
Options (exercise price $0.06/share) 100,000
As of December 31, 2021
100,000
NOTE 6 – RELATED PARTY TRANSACTIONS
Notes payable – related party
As of June 30, 2022 and December 31, 2021, the Company has a note payable in the amount of $182,484 to Eric Hill, the Company’s former Chief Executive Officer and Secretary, for moneys advanced to Curtis Mathes prior to its acquisition by the Company. The note is non-interest bearing and payable based upon a fixed percentage of sales.
As of June 30, 2022 and December 31, 2021, the Company has notes payable in the amount of $45,000 to Inform Environmental, LLC
NOTE 7 – SUBSEQUENT EVENTS
We have evaluated all events that occurred after the balance sheet date through the date when our financial statements were issued to determine if they must be reported. Management has determined that there are no events requiring disclosure.
12
Disclosure Statement Pursuant to the Pink Basic Disclosure Guidelines Curtis Mathes Corp.
2770 Main St. #130
Frisco, TX 75033 855.998.7337 http://www.curtismathes.com info@curtismathes.com
SIC Code: 3648 – Lighting Equipment
Quarterly Report
For the Period Ending: June 30, 2021 (the “Reporting Period”)
105,672,622 As of March 31, 2021, the number of shares outstanding of our Common Stock was: 105,672,622
As of December 31, 2021, the number of shares outstanding of our Common Stock was: 105,672,622
Indicate by check mark whether the company is a shell company (as defined in Rule 405 of the Securities Act of 1933 and Rule 12b-2 of the Exchange Act of 1934):
Yes: ? No:?
Indicate by check mark whether the company’s shell status has changed since the previous reporting period:
Yes: ? No:?
Indicate by check mark whether a Change in Control1 of the company has occurred over this reporting period: Yes: ? No:?
1 “Change in Control” shall mean any events resulting in:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becoming the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities;
(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;
(iii) A change in the composition of the Board occurring within a two (2)-year period, as a result of which fewer than a majority of the directors are directors immediately prior to such change; or
(iv) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
As of June 30, 2022,
the number of shares outstanding of our Common Stock was:
13
ITEM1: Nameoftheissueranditspredecessors(ifany)
Curtis Mathes Corp. (the “Company”) was incorporated in the State of Florida on July 7, 1997 and is currently active and in good standing in Florida and all other states in which it operates. A listing of all previous names used by the Company is as follows:
Curtis Mathes Corporation
Light Engine Design Corp.
Tall Trees LED Company, Inc.
Business Continuity Solutions, Inc.
Extreme Sports Marketing, Inc.
Exosphere Aircraft Company, Inc.
MMA World Holdings, Inc.
Exosphere Aircraft Company, Inc.
American Lending & Acquisition Group, Inc. Mortgage Acquisition Group, Inc.
There have not been any trading suspension orders issued by the
The Company’s principal executive office is: 2770 Main St. #130
Frisco, TX 75033
June 3, 2021 - Present
December 2, 2016 – June 2, 2021 August 16, 2016 - December 2, 2016 June 23, 2013 – August 16, 2016
April 3, 2009 – June 23, 2013
December 15, 2008 – April 3, 2009 September 24, 2008 - December 15, 2008 May 17, 2006 – September 24, 2008 March 16, 1998 – May 17, 2006
July 7, 1997 – March 16, 1998
SEC since inception.
Check box if principal executive office and principal place of business are the same address:?
Has the issuer or any of its predecessors been in bankruptcy, receivership, or any similar proceeding in the past five years? Yes: ? No:?
ITEM 2: Security Information
Trading symbol: CMCZ
Exact title and class of securities outstanding: Common Stock
CUSIP: 231468109
Par or Stated Value: $0.001
Totalsharesauthorized: 150,000,000asof:August15,2022
Total shares outstanding: 105,672,622 as of: August 15, 2022
Number of shares in the Public Float: 18,386,059 as of: August 15, 2022 Total number of shareholders of record: 110* as of: August 15, 2022
*shareholder of record may not include all shares held in “street name”
Transfer Agent
Securities Transfer Corporation 2901 N Dallas Parkway
Plano, TX 75093
Phone: (469) 633-0101
Is the Transfer Agent registered under the Exchange Act? Yes: ?
There are no restrictions on the transfer of the security other than those imposed on
14
No: ?
certificated shares bearing restrictive legends.
ITEM 3: Issuance History
On August 27, 2020, the Company issued an aggregate 500,000 shares of the Company’s common stock to a contractor for services rendered. The Company booked a compensation expense in the amount of $50,000.
On November 4, 2020, the Company issued an aggregate 500,000 shares of the Company’s common stock to a contractor for services rendered. The Company booked a compensation expense in the amount of $145,000.
ITEM 3A: Changes to the Number of Outstanding Shares
Check this box to indicate there were no changes to the number of outstanding shares within the past two completed fiscal years and any subsequent periods: ?
Shares Outstanding as of Second Most Recent Fiscal Year End:
Opening Balance
Date: December 31, 2019 Common: 104,672,622
Date of Transaction
Transaction type (e.g. new issuance, cancellation, shares returned to treasury)
Number of Shares Issued (or cancelled)
Class of Securities
Value of shares issued ($/per share) at Issuance
Were the shares issued at a discount to market price at the time of issuance? (Yes/No)
Individual/ Entity Shares were issued to (entities must have individual with voting / investment control disclosed).
Reason for share issuance (e.g. for cash or debt conversion) - OR- Nature of Services Provided
Restricted or Unrestricte d as of this filing.
Exemption or Registratio n Type.
8/27/2020 New 500,000 Common 50,000 No Youngs Marsh Limited (1) 11/4/2020 New 500,000 Common 145,000 No C&S Advisors Inc. (2)
Consulting Consulting
Restricted N/A Restricted N/A
Shares Outstanding on Date of This Report:
Ending Balance
Date June 30, 2022 Common: 105,672,622
(1) (2)
Youngs Marsh Limited is controlled by Ernest Chuang C&S Advisors Inc. is controlled by Rodger Smith
ITEM 3B: Debt Securities, Including Promissory and Convertible Notes
Check this box if there are no outstanding promissory, convertible notes or debt arrangements: ? 5/20/2019 182,484 182,484 - N/A N/A
(1) See Item 7: Officers, Directors and Control Persons for voting control disclosures
Eric Hill(1)
Previous advances
Date of Note Issuance
Outstanding Balance ($)
Principal Amount at Issuance ($)
Interest Accrued ($)
Maturity Date
Conversion Terms (e.g. pricing mechanism for determining conversion of instrument to shares)
Name of Noteholder (entities must have individual with voting / investment control disclosed).
Reason for Issuance (e.g. Loan, Services, etc.)
15
ITEM 4: Financial Statements - Unaudited
A. The following financial statements were prepared in accordance with: ?U.S. GAAP
? IFRS
B. The financial statements for this reporting period were prepared by (name of individual)2:
Name: Chris Kohler Consulting, Inc.
Title: Accountant
Relationship to Issuer: Contract Accountant
The issuer is providing the following financial statements:
C. Unaudited Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021;
D. Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021;
E. Unaudited Statement of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2022 and 2021;
F. Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021;
G. Notes to the unaudited financial statements.
ITEM 5: Business, Products and Services
The purpose of this section is to provide a clear description of the issuer’s current operations. In answering this item, please include the following:
A. Summarize the issuer’s business operations (If the issuer does not have current operations, state “no operations”)
B. Describe any subsidiaries, parents, or affiliated companies, if applicable, and a description of such entity’s business, contact information for the business, officers, directors, managers or control persons. Subsidiary information may be included by reference
C. Describe the issuers’ principal products or services, and their markets LED lighting solutions for U.S. markets as well as markets abroad
Based in Frisco, TX, the Company’s and all associated subsidiaries’ principal business is to provide Light Emitting Diode (LED) lighting for frequency-specific applications, such as horticulture, phototherapy, and light-delivery and spectrum-sensitive functions, such as wildlife preservation and light pollution reduction.
The Company and its subsidiaries consist of the following entities, which have been consolidated in the accompanying financial statements:
• Curtis Mathes Grow Lights, Inc. formerly Tall Trees LED Company
• Curtis Mathes Therapeutics, Inc. formerly Curtis Mathes, Inc.
• Curtis Mathes International, LLC (Subsidiary of Curtis Mathes Therapeutics, Inc.)
ITEM 6: Facilities
The Company currently leases shared office space in Frisco, TX under a monthly lease agreement at a flat monthly amount of $746. This lease may be terminated at any time upon 60-day notice to the Lessee.
The Company currently leases warehouse space in Raleigh, NC under a twelve-month lease agreement at a flat monthly amount of $3,605. This lease may be extended for an additional one-year period at the end of the lease.
2 The financial statements requested pursuant to this item must be prepared in accordance with US GAAP or IFRS by persons with sufficient financial skills.
16
ITEM 7: Company Insiders (Officers, Directors and Control Persons)
Name of Officer/Director or Control Person
Affiliation with Company (e.g. Officer/Director/Owner of more than 5%)
Residential Address (City / State Only)(1)
Number of shares owned
Share type/class
Ownership Percentage of Class Outstanding(2)
Robert Manes
Zacariah Hildenbrand Michael Martini Derek Enloe
James Milam
Total Directors and Officers
Eric Hill
Rene Gamez
President, Chief Operating Officer, Vice Chairman, Director and significant shareholder
Chief Scientific Officer and Director Chief Financial Officer and Director Chief Revenue Officer and Director Chief Sale Officer and Director
Frisco, TX
Frisco, TX Frisco, TX Frisco, TX Frisco, TX
16,250,000
2,550,000 227,839 0
18,800,000
8,001,670
7,722,375
Common
15.4%
Paul Williams
Former Chief Executive Officer, Former Chief Financial Officer, Former Chairman of the Board and Significant Shareholder
Frisco, TX
22,466,667
Common
21.3%
Former Chief Legal Officer, Former Director and significant shareholder
Significant Shareholder
Frisco, TX
Houston, TX
Common 2.4% Common 0.2%
0%
18.0%
Common 7.6%
Common
7.3% (1)
The address for each named executive officer and director is the same address as the Company (2) Based on 105,672,622 shares of common stock outstanding as of August 15, 2022
ITEM 8: Legal/Disciplinary History
A. Please identify whether any of the persons listed above have, in the past 10 years, been the subject of:
1. A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);
No
2. The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities;
No
3. A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or
No
4. The entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended, or otherwise limited such person’s involvement in any type of business or securities activities.
No
17
B. Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the issuer or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities.
None
ITEM 9: Third Party Providers
Legal Counsel
Michael Littman
PO Box 1839
Arvada, CO 80001 Phone (720) 530-6184
Brian Higley
Business Legal Advisors, LLC 14888 Auburn Sky Drive Draper, UT, 84020
Phone (801) 634-1984
18
ITEM10: Certifications
Chairman and Chief Executive Officer:
I, Robert Manes, as Chairman and Chief Executive Officer of Curtis Mathes Corporation (“the Company”) certify that:
1. I have reviewed the Disclosure Statements for the three and six months ended June 30, 2022 and 2021 of Curtis Mathes Corp.;
2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
withrespecttotheperiodcoveredbythisdisclosure statement;and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this
disclosure statement, fairly represent in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure document.
August 15, 2022
/s/ Robert Manes Robert Manes
Chairman and Chief Executive Officer
Chief Financial Officer:
I, Michael Martini, as Chief Financial Officer of Curtis Mathes Corporation (“the Company”) certify that:
4. I have reviewed the Disclosure Statements for the three and six months ended June 30, 2022 and 2021of Curtis Mathes Corp.;
5. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
withrespecttotheperiodcoveredbythisdisclosure statement;and
6. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this
disclosure statement, fairly represent in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure document.
August 15, 2022
/s/ Michael Martini Michael Martini
Chief Financial Officer
19
THE SUSTAINABLE GREEN TEAM, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL QUARTER ENDED JULY 2, 2022
THE SUSTAINABLE GREEN TEAM LTD. AND SUBSIDIARIES FOR THE FISCAL QUARTER ENDED JULY 2, 2022
TABLE OF CONTENTS
Condensed Unaudited Consolidated Balance Sheets
Condensed Unaudited Consolidated Statements of Operations
Condensed Unaudited Consolidated Statements of Changes in Stockholders’ Equity Condensed Unaudited Consolidated Statements of Cash Flows
Notes to Unaudited Condensed Consolidated Financial Statements
Page
3
4
5
6 - 7 8 - 23
2
ASSETS
Short-term investments
Accounts receivable, net of allowance for doubtful accounts Due from Factor
Current Assets Cash
$
788,242 52 2,538,626 - 7,588,085 1,503,504 12,418,509
52,049,146
1,051,702 324,000 84,440 977,355 2,437,497
66,905,152
2,671,776 249,186 4,486,461 7,407,423
751,606 17,480,621 18,232,227 25,639,650
-
9,046 34,636,450 6,620,006 41,265,502
66,905,152
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
July 2, 2022
January 1, 2022
$ Inventories 6,872,474
Prepaid expenses and other current assets Total Current Assets
Property and equipment, net
Other Assets
Long-term investments Goodwill
Intangibles, net
ROU asset
Total Other Assets
Total Assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses Current portion of lease liability
Notes payable
Total Current Liabilities
Long-term Liabilities
Lease liabilities, net of current portion Notes payable, net of current portion
Total Long-term Liabilities Total Liabilities
Commitments and contingencies
Stockholders' Equity
Preferred Series A stock, $0.0001 par value, 5,000,000 shares authorized,
90 shares outstanding
Common stock, $0.0001 par value; 245,000,000 shares authorized;
88,026,816 and 90,460,425 shares issued and outstanding, respectively Additional paid-in capital
Retained earnings
Total Stockholders' Equity
1,985,014 10,426,812
59,298,068
1,075,426 324,000 79,160 847,037 2,325,623
72,050,503
4,559,059 211,950 8,074,043 12,845,052
654,149 18,663,621 19,317,770 32,162,822
-
8,569 34,961,858 4,917,254 39,887,681
$
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
$
55,544 52 516,170 997,558
$ $
$
Total Liabilities and Stockholders' Equity
72,050,503
$
3
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
July 2, 2022
July 3, 2021
July 2, 2022
22,553,804 21,241,500 1,312,304
2,571,627 11,280 2,582,907
(1,270,603)
(923,322) 598,300 1,236,080 16,923 124,269 1,052,250
(218,353) 21,968 (240,321)
(0.00) (0.00)
87,410,242 93,050,246
July 3, 2021
Three Months Ended
Six Months Ended
Net Revenue Cost of revenue
Total gross profit
Operating expenses
Selling, general and administrative Depreciation and amortization
Total operating expenses
Income (loss) from operations
Other income (expense) Interest expense, net Bargain purchase gain
Debt forgiveness
Gain on sales of fixed assets Other income, net
Total other expense
Income (loss) before provision for income taxes Provision for income taxes
Net Income (loss) $
Net Income (loss) per common share - basic $ Net Income (loss) per common share - diluted $
Weighted average shares outstanding - basic Weighted average shares outstanding - diluted
$
12,224,356 12,034,443 189,913
1,296,221 5,640 1,301,861
(1,111,948)
(498,278) - 1,236,080 - 57,664 795,466
(316,482) - (316,482)
(0.00) $ (0.00) $
85,723,155 91,363,159
$
11,697,421 10,998,669 698,752
1,058,349 7,740 1,066,089
(367,337)
(235,797) - 1,458,200 - 3,534 1,225,937
858,600 (58,315)
916,915 $
0.01 $ 0.01 $
89,493,405 89,493,405
$
$
20,989,352 18,889,880 2,099,472
2,223,303 14,600 2,237,903
(138,431)
(485,585) - 1,458,200 - (47) 972,568
834,137 38,656 795,481
0.01 0.01
89,466,757 89,466,757
$
$
$ $
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
4
Six Months Ended July 2, 2022: Balance at January 1, 2022
Stock subscriptions Stock redemptions Net income
Balance at April 2, 2022
Stock subscriptions Stock redemptions Net loss
Balance at July 2, 2022
Six Months Ended July 3, 2021:
Balance at January 2, 2021
Stock issued for 2020 debt inducement Stock issued for compensation
Net loss
Additional
Preferred Stock Common Stock Paid-in Retained
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
Shares
90
90
90
Amount Shares Amount Capital Earnings Total
$
$
$
- 90,460,425 1,466,667 (3,900,275)
- 88,026,817
266,667 (2,600,183)
- 85,693,300
$
$
9,046 147 (390)
8,803
26.67 (260)
$ 8,569
$34,636,450 1,099,853 (584,651)
$35,151,652
199,973 (389,767)
$34,961,858
Additional Paid-in Capital
$ 6,825,996 62,970 28,797
$ 6,917,763
$ 6,620,006
(877,459) 76,161
$ 5,818,710
(584,972) (316,482)
$ 4,917,256
Retained Earnings
$ 3,957,946
(121,435) $ 3,836,511
916,915 $ 4,753,426
$41,265,502 1,100,000 (1,462,500) 76,161
$40,979,163
200,000 (975,000) (316,482)
$39,887,681
Total
$10,792,859 63,000 28,800 (121,435)
$10,763,224 916,915 $11,680,139
Preferred Stock
Common Stock
Balance at April 3, 2021
Net income
Balance at July 3, 2021
Shares
90
90
Amount
$ -
$ -
Shares
89,168,405 300,000 25,000
89,493,405
$
$
Amount
8,917 30 3
8,950
90
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
$ -
89,493,405
$
8,950
$ 6,917,763
5
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Cash flows from operating activities:
Net Income (Loss)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts Depreciation and amortization
Common stock issued as compensation Equity investment in long term investment Bargain purchase gain
Gain on sale of fixed assets
Gain on Paycheck Protection Program debt forgiveness Changes in operating assets and liabilities:
$
(240,321)
- 1,819,666 - (50,667) (598,300) (16,923) (1,236,080)
$
Accounts receivable, net
Due from Factor
Inventory 715,611
Prepaid expenses and other current assets
Accounts payable and accrued expenses Net cash from (used in) operating activities
Cash flows from investing activities:
Purchases of property, and equipment & ROU assets
Net short-term investment redemptions (purchases)
Proceeds from long-term investments Net cash from (used in) investing activities
Cash flows from financing activities: Borrowings under factoring
Repayments under factoring
Principal payments on leases
Proceeds from notes payable
Payment on notes payable
Payment on notes payable, related parties Stock Subscriptions
Stock redemptions
Net cash provided by (used in) financing activities
Net increase (decrease) in cash Cash - beginning of period Cash - end of period
$
(481,510) 1,887,283 2,270,567
(3,450,109) - 26,943 (3,423,166)
10,585,975 (10,032,885) (134,694) 4,507,500 (3,368,495) - 1,300,000 (2,437,500) 419,901
(732,698) 788,242 55,544
$
Six Months Ended July 2, 2022
July 3, 2021
795,481
(350) 1,692,744 28,800 - - - (1,458,200)
(2,206,528) - 1,470,093 5,372 1,049,101 1,376,513
(323,864) (600,411) 34,580 (889,695)
-
- (87,699) 1,236,080 (701,130) (698,194) - - (250,943)
235,875 506,287 742,162
1,469,366 (997,558)
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
6
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS continued (Unaudited)
Six Months Ended
Supplemental cash flow information: Cash paid for:
Interest
Income taxes
Non-cash investing and financing activities:
Forgiveness on note payable
Purchase of property and equipment for notes payable Acquisition of right of use assets for lease obligations Property and equipment bargain purchase recognition Stock issued for accrued debt inducement
$ $
$ $ $ $ $
July 2, 2022
954,687 -
1,236,080 4,867,658 -
598,300 -
July 3, 2021
$ 186,003 $-
$ 1,458,200 $ 197,515 $ 684,142
$ 63,000
The accompanying footnotes are an integral part of these condensed consolidated
financial statements.
7
THE SUSTAINABLE GREEN TEAM, LTD. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS
Corporate History
The Sustainable Green Team, Ltd., (f/k/a Sierra Gold Corp.) (the “Parent” or “SGTM”), a Delaware corporation, conducts business activities principally through its three wholly-owned subsidiaries: National Storm Recovery LLC (“NSR LLC”), a Delaware limited liability company, Mulch Manufacturing, Inc., an Ohio corporation (“MM”) and Sierra Gold Merger Corp. (“SGMC”), a Delaware corporation (collectively, the “Company”).
The Company was initially formed, under the name Alpha Diamond Corporation in the State of Nevada on January 22, 1997. It’s undergone multiple name changes over the years and a domicile change to Wyoming on February 15, 2011.
Effective April 18, 2019, Sierra Gold Corp., (“SGCP”), entered into an equity exchange agreement (the “Merger”), as amended on December 31, 2019 with NSR LLC, pursuant to which SGCP acquired all of the membership units of NSR LLC. Upon closing, NSR LLC became a wholly-owned subsidiary of SGCP.
On July 22, 2019, a Certificate of Amendment was filed with the State of Wyoming to change the name of the Company from “Sierra Gold Corporation” to “National Storm Recovery, Inc.” and to affect a 1 for 10,000 reverse stock split. At September 11, 2019, the Company’s trading symbol changed from “SGCP” to “NSRI”.
The stock split decreased the issued and outstanding shares of its common stock from 3,406,865,285 to 602,636 (after rounding up to a 100 share minimum) before SGCP issued 40,000,000 shares of its common stock to the members of NSR LLC as consideration for the equity interest’s exchange. As a result of the Merger, NSR LLC members acquired 99% of SGCP’s issued and outstanding shares of common stock and SGCP changed its principal focus to providing tree services, debris hauling and removal, biomass recycling, mulch manufacturing, packaging and sales.
The Merger was treated as a reverse recapitalization effected by an equity exchange for financial and reporting purposes since SGCP was deemed to be a shell corporation with nominal operations and no assets at the time of the merger. NSR LLC is considered the acquirer for accounting purposes, and the SGCP’s historical financial statements before the Merger have been replaced with the historical financial statements of NSR LLC before the Merger in future filings.
On December 31, 2019, the Company entered into a restructuring as a holding company pursuant to Delaware General Corporation Law (“DGCL”) §251(g) known as “the Delaware Holding Company Statute.” In order to affect this restructuring NSRI and NSR LLC company each changed domiciles to the State of Delaware by filing Certificates of Conversion. Immediately thereafter, NSRI incorporated SGTM as its wholly-owned subsidiary and SGTM formed Sierra Gold Merger Corp., a Delaware corporation (“SGMC”) as its wholly-owned subsidiary. Similarly, NSR LLC issued SGTM, 1,000 limited liability company Common Membership Units. Each of the four parties next executed an Agreement and Plan of Merger (the “Merger Agreement”) as well as a Certificate of Merger, the latter of which was filed with the Delaware Secretary of State Division of Corporations on December 31, 2019 (collectively, the “Reorganization”). Pursuant to the terms of the Reorganization, NSRI merged down into SGMC with SGMC surviving as the successor to the reorganization, with all of the assets and liabilities of NSRI merging into SGMC and the separate existence of NSRI ceasing. The shares of SGTM and Membership Interests of NSR LLC, held by NSRI were canceled in the reorganization as part of the restructuring and the shares of NSRI became exchangeable for shares of SGTM on a one for one basis making SGTM the parent to both SGMC and NSR LLC as well as making SGTM the publicly-traded successor to NSRI. After obtaining FINRA approval on July 21, 2020, the Company changed its trading symbol to SGTM.
Effective January 31, 2020, the Company entered into a Business Combination Agreement (the “Mulch Acquisition”) pursuant to which MM has become its wholly-owned subsidiary. Under the Mulch Acquisition, all issued and outstanding common stock in MM were converted into an aggregate of 40,000,000 shares of the Company’s common stock (See Note 5).
The Company closed on the acquisition of 100% of the membership interests in Day Dreamer Productions LLC (DDP) on December 30, 2021. DDP is in the business of producing informational and promotional videography (See Note 5).
The Company closed on the acquisition of the Beaver, Washington real estate property on March 18, 2022. The Beaver mill is expected to come online in 2024 (See Note 5).
8
Business Overview
The Company provides tree services, debris hauling and removal, biomass recycling, mulch manufacturing, packaging and sales. The Company’s objective is to provide a solution for the treatment and handling of tree debris that has historically been disposed of in landfills, creating an environmental burden and pressure on disposal sites around the nation. This objective is founded in sustainability, based on vertically integrated operations that begin with collecting of tree debris through its tree services and collection sites, through its processing services, and then recycling and using that tree debris as a feedstock that is manufactured into a variety of organic, attractive, next-generation mulch products that are packaged and sold to landscapers, installers, and garden centers. The Company plans to expand its operations through a combination of organic growth and strategic acquisitions of synergistic companies that are both accretive to earnings and enable the Company to be positioned for rapid growth. The Company operates in a highly seasonal industry generating most of its sales and profits in the first six months of the year.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements as of July 2, 2022 and January 1, 2022 and for the three months and six months ended July 2, 2022 and July 3, 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial position at such date and the operating results and cash flows for such periods. Operating results for the three months and six months ended July 2, 2022 are not necessarily indicative of the results that may be expected for the entire year or for any subsequent interim period.
The Company has adopted the period end dates conforming to the industry standards used by MM, the Company’s largest operating subsidiary. These period end dates follow a 52/53 week fiscal year which ends on the Saturday nearest to December 31.
These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited financial statements included in the Company’s Independent Audit for Years Ended January 1, 2022 and January 2, 2021 filed with the OTC Markets on March 31, 2022.
Principles of Consolidation
The unaudited condensed consolidated financial statements are presented on a comparative basis. The unaudited condensed consolidated balance sheets at July 2, 2022 and January 2, 2022 includes the accounts of SGTM, NRS LLC, MM, DDP LLC, Rose, and SGMC.
The unaudited condensed consolidated statement of operations for the three and six months periods ended July 2, 2022 includes the accounts of SGTM, NRS LLC, MM, DDP LLC, Rose, and SGMC. For the three and six months periods ended July 3, 2021 includes the accounts of SGTM, NRS LLC, MM, Rose, and SGMC.
The unaudited condensed consolidated statement of changes in stockholders’ equity for the three and six months ended July 2, 2022, includes the account balances of SGTM, NRS LLC, MM, DDP LLC, Rose, and SGMC. The three and six months ended July 3, 2021, includes the account balances of SGTM, NRS LLC, MM, Rose, and SGMC.
The unaudited condensed consolidated statement of cash flows for the period ended July 2, 2022 includes the accounts of SGTM, NRS LLC, MM DDP LLC, and Rose. The six months ended July 3, 2021, includes the accounts of SGTM, NRS LLC, MM and Rose.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions, revenue and expenses and disclosure of contingent liabilities at the date of the consolidated financial statements. The Company bases its estimates and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable. As future events and their effects cannot be determined with precision, actual results could differ from these estimates which may cause the Company’s future results to be affected.
9
Revenue
The Company’s revenues are derived from two major types of services to clients: landscape recovery services and the manufacturing and sale of landscape mulch. With respect to landscape recovery services, the Company provides tree services, debris hauling and removal and biomass recycling.
The Company recognizes revenue when its performance obligations are satisfied. With respect to landscape recovery services, its performance obligation is satisfied upon the completion of the landscape services for its customers. With respect to the manufacturing and selling of landscape mulch, its performance obligation is satisfied upon delivery to its customers. Services are provided for cash or on credit terms. These credit terms, which are established in accordance with local and industry practices, require payment generally within 30 days of performance or end of season for qualifying orders. The Company estimates and reserves for its bad debt exposure based on its experience with past due accounts and collectability, the aging of accounts receivable and its analysis of customer data.
Disaggregated Revenues
Revenue consists of the following by service and product offering for the three months ended July 2, 2022 and July 3, 2021:
Three Months Ended
Six Months Ended
Landscaping Recovery Services Manufacturing and Sales of Mulch Total
Cash
July 2, 2022
$ 1,166,555 $ 11,057,801 $ 12,224,356
July 3, 2021
$ 876,233 $ 10,821,188 $ 11,697,421
July 2, 2022
$ 2,103,030 $ 20,450,774 $ 22,553,804
July 3, 2021
$ 1,576,547 $ 19,412,805 $ 20,989,352
The Company considers all highly liquid short-term instruments that are purchased with an original maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of July 2, 2022 and January 1, 2022.
Account Receivable
The Company periodically assesses its accounts receivable for collectability on a specific identification basis. If collectability of an account becomes unlikely, an allowance is recorded for that doubtful account. As of July 2, 2022 and January 1, 2022, the Company’s allowance for doubtful accounts was $60,000.
Due from Factor
The Company has entered into an accounts receivable factoring arrangement with a financial institution (the “Factor”) on March 2, 2022. Pursuant to the terms of the arrangement, the Company may transfer a portion of its receivables to the Factor, on a recourse basis. The eligible accounts receivable consists of accounts receivable generated by sales to certain customers. The eligible amount of customer accounts receivables which may be transferred under the Receivables Facility is $5,000,000. The Receivables Facility expires on July 2, 2023.
As of July 2, 2022, there are $997,558 receivables Due from factor on the Company’s condensed consolidated balance sheet.
Inventories
Inventories are stated at the lower of cost or net realizable value, with cost determined by the weighted-average cost method using full absorption costing for manufactured goods.
Property and Equipment
Property and equipment are recorded at cost. Expenditures that enhance the useful lives of the assets are capitalized and depreciated.
Depreciation is computed using the straight-line method over the estimated useful lives of the related capitalized assets. Machinery and equipment is generally depreciated over 7 years. Vehicles are generally depreciated over 5 years.
10
Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of property and equipment, its cost and accumulated depreciation is removed from the accounts and the resulting gain or loss, if any, is reflected in operations.
Impairment of Long-Lived Assets and Right of Use Asset
Intangible Assets
The Company records its intangible assets at cost in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other. Finite lived intangible assets are amortized over their estimated useful life using the straight-line method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated. During the three and six months ended July 2, 2022 and July 3, 2021, the Company did not record a loss on impairment.
Goodwill
Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at year end, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment at the reporting level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit. No impairment of goodwill was recorded by the Company for the three and six months ended July 2, 2022 and July 3, 2021.
Advertising and Marketing Costs
The Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were $40,932 and $113,924 for the three and six months ended July 2, 2022, respectively, and $38,003 and $110,326 for the three and six months ended July 3, 2021, respectively, and are recorded in selling, general and administrative expenses on the statement of operations.
Fair Value Measurements
ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.
The Company’s financial assets and liabilities carried at fair value measured on a recurring basis as of July 2, 2022 and January 1, 2022, consisted of the following:
The Company reviews long-lived assets, including finite-lived intangible assets and right of use (“ROU”) lease assets, for
impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on
discounted cash flows or appraised values, depending on the nature of the assets.
Investment in mutual funds
$
52
$
(Level 2)
- $
-
Total fair value at July 2, 2022
$ 52
Quoted prices in active markets for identical Assets (Level 1)
Significant other Observable inputs
Significant other Unobservable inputs (Level 3)
11
Total fair value at January 1, 2022 Investment in mutual funds $ 52
Net Income (Loss) per Common Share
Quoted prices in active markets
for identical Assets (Level 1) $ 52
Significant other Observable inputs
Significant other Unobservable inputs (Level 3)
$
(Level 2)
- $
-
Basic net income (loss) per common share is computed by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share includes the effect of Common Stock equivalents (stock options, unvested restricted stock, and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive.
Three Months Ended
Six months Ended
July 2, 2022
Numerator for basic and diluted earnings (loss) per share:
Net income (loss) $ (316,482)
Denominator for basic earnings (loss) per share –
weighted average shares outstanding 85,723,155
Convertible notes - Denominator for diluted earnings (loss) per share –
weighted average and assumed conversion 91,363,159
Net income (loss) per share:
Basic net income (loss) per share $ (0.00)
Diluted net income (loss) per share $ (0.00)
Income Taxes
$
July 3, 2021 July 2, 2022
916,915 $ (240,321)
89,493,405 87,410,242 - -
89,493,405 93,050,246
$0.01 $ (0.00) $0.01 $ (0.00)
$
July 3, 2021
795,481
89,466,757 -
89,466,757
$0.01 $0.01
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company utilizes ASC Topic 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely- than-not” that a deferred tax asset will not be realized. For tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit in the consolidated financial statements.
For the three months ended July 2, 2022 and July 3, 2021, the Company recognized approximately $0 tax expense and a $58,000 tax benefit, respectively, and $22,000 and $39,000 tax expense for the six months ended July 2, 2022 and July 3, respectively. These tax provisions were based on a 27% effective rate for federal and state income taxes after accounting for permanent differences between book and taxable income.
The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations.
Recent Accounting Pronouncements
12
In December 2019, the FASB issued ASU 2019-12, simplifying the Accounting for Income Taxes (Topic 740) as part of its simplification initiative to reduce the cost and complexity in accounting for income taxes. This guidance is effective for interim and annual reporting periods beginning within 2021.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard was effective for the Company’s interim and annual periods beginning January 1, 2019 and was applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The adoption of ASU 2016 - 02 had a material impact on the Company’s consolidated financial statements and related disclosures.
NOTE 3 – INVENTORIES
Inventories are stated at the lower of cost or net realizable value, with cost determined by the weighted-average cost method. The Company’s inventories are comprised of the following for the periods ended July 2, 2022 and January 1, 2022:
July 2, 2022 3,129,444
January 1, 2022
$ $
July 2, 2022
Machinery and equipment $
Vehicles 4,405,512 Land 6,807,573 Buildings 6,246,418
$ $
4,453,785 1,155,439 1,978,861
7,588,085
Raw Materials Work in process Finished goods
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
1,426,494 2,316,536 6,872,474
Leasehold improvements Construction in process
Less: accumulated depreciation Property and equipment, net
$
329,318 24,000,780 67,018,163 (7,720,095) 59,298,068
25,228,562
$
$
January 1, 2022
20,777,465 4,383,043 6,807,573 6,234,718
283,268 19,599,106 58,085,173 (6,036,027) 52,049,146
Total depreciation expense between cost of revenue and operating expenses for the three months and six months ended July 2, 2022 was $836,616 and $1,684,068, respectively. For the three months and six months ended July 3, 2021, the total depreciation expense between cost of revenue and operating expenses was $800,616 and $1,601,232, respectively.
NOTE 5 – ACQUISITIONS
Mulch Manufacturing, Inc. Acquisition
On January 31, 2020, the Company entered into a Business Combination Agreement (the “Mulch Acquisition”) with MM and its sole shareholder, Ralph Spencer (“Spencer”) (collectively the “MM Parties”), pursuant to which the Company acquired all of the shares of MM. Upon closing, MM became a wholly-owned subsidiary of SGTM.
13
Pursuant to the Mulch Acquisition, at the effective time of the acquisition:
• All of MM’s outstanding common stock was exchanged for an aggregate of 40,000,000 shares of SGTM’s common stock.
• One million shares previously issued to the MM shareholder in connection with the sale of equipment by MM to NSR LLC in November 2019 were cancelled.
• There were specific excluded assets that were retained by Spencer and treated as transferred to Spencer prior to the acquisition consisting of cash, real estate, and certain vehicles and equipment. Spencer agreed to allow the Company to use some of the real estate rent-free until January 31, 2022, at which time the Company has the option of either leasing or purchasing it at the fair market value (see Note 11).
• All of the existing MM notes, notes, accounts receivable, and inventory at the date of the Mulch Acquisition are included in the acquisition and the Company has immediate possession of them by its ownership of MM. However, the 40 million shares of the Company’s common stock that was issued as consideration was based on these assets being removed from MM prior to the acquisition. The value of these assets are valued separately from the share exchange and that certain demand promissory note payable to Spencer in the amount of approximately $14 million was adjusted to reflect the value of the inventory, accounts receivable, and any other sums lent by Spencer to MM.
The Company accounted for these transactions in accordance with the acquisition method of accounting for business combinations. An independent appraisal, made in February 2020, determined the fair market value of MM’s property and equipment to be $17,228,295. Assets and liabilities of the acquired business were included in the unaudited condensed consolidated balance sheets as of July 2, 2022 and January 1, 2022, based on their respective estimated fair values on the date of acquisition. Based on a closing market price of $0.15 per share on the January 31, 2020, business combination date, the assumption of net liabilities plus a bargain purchase recognition and asset write-up, the Company is recognizing the allocation to the accounts of MM as follows:
Appraised fair market value of property and equipment
Less: Net book value of just MM's property and equipment on January 31, 2020
Excess of fair market over net book value of MM property and equipment Value of common stock issued for MM
$
17,228,295 1,883,657
15,344,638
Net book value of MM on January 31, 2020: Property and equipment
Investments
Prepaid expenses and other assets
Supply agreement
Accounts payable and accrued expenses
Notes payable
$ 6,000,000
Net book value (assumed) of MM on January 31, 2020
Total purchase price, including assumed net liabilities, of MM
Excess of fair value over net book value plus
purchase price of MM property and equipment (bargain purchase gain)
Purchase price of MM
Bargain purchase gain and property and equipment write-up Net book value of MM on January 31, 2020
Total to be allocated
Allocation of MM purchase price and bargain purchase gain:
(1,856,052)
$
1,883,657 830,000 192,361 453,750
(1,215,820) (4,000,000)
$ $ $
7,856,052 7,488,586
7,856,052
7,488,586 (1,856,052) 13,488,586
14
Property and equipment Investments
Prepaid expenses and other assets Supply agreement
Accounts payable and accrued expenses Notes payable
Day Dreamer Productions LLC Acquisition
$
$
17,228,295 830,000 192,361 453,750
(1,215,820)
(4,000,000) 13,488,586
The Company entered into an agreement to acquire 100% of the membership interest of Day Dreamer Productions, LLC around January 18, 2021, in exchange for 200,000 shares of the Company’s stock. This transaction was closed on December 30, 2021, when the Company issued the shares to its sole member. This member was also retained as an employee with responsibility for managing the activities of Day Dreamer Productions, LLC.
Beaver, Washington Real Estate Acquisition
On March 18, 2022, the Company acquired the Beaver, Washington real estate property for $1,025,475, of which, $200,000 was previously put down as deposits, and $825,475 was paid at closing. The acquisition of the Beaver, Washington sawmill was closed in December 2021. We expect to begin producing pine bark and marketable lumber at the Beaver mill in 2024.
NOTE 6 – INTANGIBLE ASSETS
The below table summarizes the identifiable intangible assets as of July 2, 2022 and January 1, 2022:
Supply contract (1) Less:
Total
(1)
Useful life
10
$ $ $ $
July 2, 2022
453,750
(57,090) (317,500) 79,160
$ $ $ $
January 1, 2022
453,750
(51,810) (317,500) 84,440
Accumulated amortization Impairment
These intangible assets were acquired in the acquisition of MM on January 31, 2020.
The weighted average useful life remaining on identifiable intangible assets is 7.50 years.
Amortization of identifiable intangible assets for the three months ended July 2, 2022 and July 3, 2021 was $5,280 and $4,400,
respectively.
The below table summarizes the future amortization expense for the next five years:
2022 2023 2024 2025 2026 Thereafter
$ 5,280
$ 10,560
$ 10,560
$ 10,560
$ 10,560
$ 31,640
$ 79,160
15
NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following amounts:
Accounts payable Accrued interest Accrued expenses
NOTE 8 –NOTES PAYABLE
$ $
$ $
Jul 2, 2022
10,438,353
3,730,562 1,125,140 1,143,831
-0- 296,573 281,894 311,820 295,935 195,685 190,073
2,350,056 8,076 313,644 2,671,776
$
July 2, 2022
4,137,152 25,140 396,767 4,559,059
$
January 1, 2022
Seller note payable bearing interest at 6.0%, monthly payments of principal and interest of $76,300 beginning October 2021 with a $9,819,606 balloon due September 2024, secured by mortgaged real estate
Jan 1, 2022
10,580,504
4,100,000 1,400,000 1,297,817
1,236,080 342,680 325,718 347,452 334,000 222,887 217,213
Various third-party obligations secured by assets the Company
acquired subject to this indebtedness to various third-party creditors, bearing interest at a 5% average rate. Monthly payments of $122,881 principal and interest beginning January 2022 through December 2024
Unsecured note payable to seller on bulk equipment purchase, bearing 4.0% interest. First $300,000 payment of principal and interest due March 2022, $200,000 payments of principal and interest due quarterly thereafter until paid in full
Note payable to a bank, secured by equipment, bearing interest at 2.95%. Monthly payments of principal and interest in the amount of $28,698 beginning January 2021 and due through December 2025
Unsecured note payable to a financial institution under the SBA Paycheck Protection Program for MM bearing interest at 1.0%. Monthly payments of principal and interest in the amount of $82,061 beginning August 2022 are due through April 2023.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $8,750 due August 2020 through July 2025.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $8,316 due August 2020 through July 2025.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $7,034 due August 2020 through July 2025.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $7,392 due February 2021 through January 2026.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $5,230 due December 2020 through November 2025.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $5,201 due November 2020 through October 2025.
16
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $5,201 due October 2020 through September 2025.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $5,341 due August 2020 through July 2025.
Note payable to an equipment financing company bearing interest
at 3.95%. Monthly payments of principal and interest of $5,201 due August 2020 through July 2025.
Note payable to the individual seller of the landscaping and recovery services business to NSR LLC bearing interest at 5%. Monthly payments of $5,000 are due through October 2023 with a $100,000 balloon due November 2023
Non-interest bearing note payable to an equipment financing company with monthly principal payments of $5,842 due December 2021 through November 2023
Non-interest bearing note payable to an equipment financing company with monthly principal payments of $16,460 due May 2021 through April 2022.
Note payable to an equipment financing company bearing interest
at 0.00%. Monthly payments of principal of $6,993 beginning November 2020 are due through October 2022
Note payable to an equipment financing company bearing interest
at 9%. Due to three month COVID-19 payment suspension, monthly payments
of principal and interest increased from $3,933 to $3,993 and extended three months through December 2023
Note payable to an equipment financing company bearing interest at 5.94%. Monthly payments of principal and interest of $1,174 beginning January 2022 through March 2028
Note payable to an equipment financing company bearing interest
at 8%. Due to three month COVID-19 payment suspension, monthly payments
of principal and interest increased from $2,410 to $2,452 and extended three months through December 2023
Note payable to an equipment financing company bearing interest
at 9%. Due to three month COVID-19 payment suspension, monthly payments
of principal and interest increased from $1,861 to $1,890 and extended three months through December 2023
Note payable to an equipment financing company bearing interest
at 8%. Due to three month COVID-19 payment suspension, monthly payments
of principal and interest increased from $1,808 to $1,840 and extended three months through December 2023
Note payable to an equipment financing company bearing interest
at 11%. Due to five month COVID-19 payment suspension, monthly payments of principal and interest of $1,692 due from August through July 2023 with a $10,152 balloon payment in August 2023
Note payable to an equipment financing company bearing interest
at 12%. Due to five month COVID-19 payment suspension, monthly payments of principal and interest of $1,749 due from August 2020 through June 2023 with a $10,496 balloon payment in July 2023
180,906 212,727
181,053 209,200
185,497 208,226
170,410 195,779 110,988 134,353 -0- 65,838
27,971 69,928
67,121 87,611 67,626 73,217
41,568 54,397
31,770 41,466
31,158 40,764
28,132 36,446
28,821 37,220
17
Note payable to an equipment financing company bearing interest
at 8%. Monthly payments of principal and interest of $977 due through August 2024
Note payable to an equipment financing company bearing interest
at 8%. Monthly payments of principal and interest of $932 due through September 2024
Note payable to an equipment financing company bearing interest
at 8%. Monthly payments of principal and interest of $766 due through August 2024
Note payable to an equipment financing company bearing interest
at 8%. Due to three month COVID-19 payment suspension, monthly payments of principal and interest increased from $751 to $765 and extended three months through January 2024
Note payable to an equipment financing company bearing interest
at 10.64%. Monthly payments of principal and interest of $1,060 due through February 2027
Note payable to an individual bearing interest at 12%. Monthly payments of interest of $5,000 starting on March 17, 2022 and due through February 2023. The principal is due no later than February 17, 2023, with no penalty for prepayment
Note payable to a financing company bearing interest at 25.0%. Weekly payments of principal and interest of $54,348 due through March 2023
Note payable to an equipment financing company bearing interest
at 11.45%. Monthly payments of principal and interest of $18,121 due through March 2027
Note payable to an equipment financing company bearing interest
at 11.45%. Monthly payments of principal and interest of $11,312 due through March 2027
Note payable to an equipment financing company bearing interest
at 12.45%. Monthly payments of principal and interest of $7,762 due through April 2027
Note payable to an equipment financing company bearing interest
at 12.13%. Monthly payments of principal and interest of $2,610 due through April 2027
Note payable to an equipment financing company bearing interest
at 12.00%. Monthly payments of principal and interest of $812 due through June 2028
Note payable to an equipment financing company bearing interest
at 10.59%. Monthly payments of principal and interest of $7,067 due through June 2028
Note payable to an equipment financing company bearing interest
at 10.20%. Monthly payments of principal and interest of $4,359 due through April 2027
Note payable to an insurance financing company bearing interest
at 5.5%. Monthly payments of principal and interest of $21,774 due through February 2023
23,251 28,071 22,219 27,581 18,523 22,395
13,579 17,512 45,975 -0-
500,000 -0- 1,652,174 -0-
793,947 -0- 495,616 -0- 336,981 -0- 117,000 -0-
41,550 -0- 375,422 -0- 201,382 -0- 149,664 -0-
18
Note payable to an equipment financing company bearing interest
at 11.86%. Monthly payments of principal and interest of $2,588 due through
May 2025 76,273
Note payable to an equipment financing company bearing interest
at 3.61%. Monthly payments of principal and interest of $7,907 due through
April 2027 413,642
Note payable to an equipment financing company bearing interest
at 3.61%. Monthly payments of principal and interest of $6,937 due through
April 2027 362,888
Note payable to an equipment financing company bearing interest
at 3.49%. Monthly payments of principal and interest of $7,118 due through
April 2027 385,380
Note payable to an equipment financing company bearing interest
at 7.70%. Monthly payments of principal and interest of $2,416 due through
May 2027 116,698
Note payable to an equipment financing company bearing interest
at 6.99%. Monthly payments of principal and interest of $14,056 due through
June 2027 709,989
Note payable to an equipment financing company bearing interest
at 6.99%. Monthly payments of principal and interest of $2,307 due through
June 2027 116,519
Note payable to an equipment financing company bearing interest
at 6.99%. Monthly payments of principal and interest of $1,468 due through
June 2027 74,119
-0- -0- -0- -0- -0- -0- -0- -0- -0- -0- -0-
21,967,082 4,486,461 $ 17,480,621
Note payable to an equipment financing company bearing interest
at 6.99%. Monthly payments of principal and interest of $2,780 due through June 2027
140,394 262,130 129,462
26,737,664 8,074,043 $ 18,663,621
Note payable to a financing company bearing interest
at 10%. Weekly payments of principal and interest of $8,719 due through June 2023
Note payable to a financing company bearing interest
at 12%. Weekly payments of principal and interest of $5,346 due through March 2023
Total notes payable to unrelated parties
Short-term portion of notes payable
Long-term portion of notes payable
The schedule of future maturities on the above notes are as follows:
Year 2022 2023 2024 2025 2026 2027
& after
Amount $ 4,118,605 5,467,326 13,655,864 1,832,939 1,144,131 518,799 $ 26,737,664
19
The above notes include one Paycheck Protection Program (PPP) loan by MM in the amount of $1,236,080 which was forgiven during the period ended July 2, 2022. The Company has recorded the gain on forgiveness of this indebtedness for the period ended July 2, 2022.
NOTE 9 - STOCKHOLDERS’ EQUITY
Preferred Stock
On December 31, 2019, the Company’s Board of Directors adopted articles of incorporation in the state of Delaware authorizing, without further vote or action by the stockholders, to create out of the unissued shares of the Company’s common stock, $0.0001 par value Preferred Stock. The Board of Directors is authorized to establish, from the authorized and unissued shares of Preferred Stock, one or more classes or series of shares, to designate each such class and series, and fix the rights and preferences of each such class of Preferred Stock; which class or series shall have such voting powers, such preferences, relative, participating, optional or other special rights, and such qualifications, limitations or restrictions as shall be stated and expressed in the resolution or resolutions providing for the issuance of such class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof. The articles of incorporation and designation authorizes the issuance of 5,000,000 shares of Preferred Stock, of which 100 shares have been designated as Series A Preferred Stock, of which 90 of Series A are issued and outstanding as of October 2, 2021. Each holder of outstanding shares of Series A Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Series A Preferred Stock held by such holder as of the record date for determining stockholders entitled to vote on such matter, with each share casting a vote equal to: the quotient of the sum of all outstanding shares of common stock together with any and all other securities of the Company that provide for voting on an “as converted” basis divided by 0.99.
Equity Transactions During the Period
The following issuances of common stock affected the Company’s Stockholders’ Equity:
On January 13, 2021, the Company issued 300,000 shares in satisfaction of a 2020 accrual for debt financing cost.
On March 5, 2021, the Company issued 25,000 shares to an employee as compensation.
On August 16, 2021, the Company recognized a $17,484,728 capital contribution from the extinguishment of debt.
On August 25, 2021, the Company issued 6,000,000 shares in exchange for a $3,400,000 note.
On October 4, 2021, the Company issued 125,000 shares for consulting service compensation.
Between October 15, and December 15, 2021, the Company redeemed 11,397,984 shares pursuant to a stock repurchase agreement (see Note 11).
Between October and December 15, 2021, the Company issued 5,640,004 shares pursuant to subscription agreements at a price of $0.75 per share. These agreements provided for piggyback registration rights on a potential future registration of Company stock. The agreements also provided stock warrants equal to the number of subscribed shares. These warrants can be exercised at a price of $1.50 per share and expire after one year. No allocation of proceeds was made to the warrants since the subscribed shares of common stock were issued at a price below that of the publicly traded shares.
On December 30, 2021, the Company issued 200,000 shares pursuant to an agreement to acquire 100% of the membership interest in Day Dreamer Production, LLC.
On December 31, 2021, the Company issued 400,000 shares to acquire equipment in Beaver, WA.
On January 16, 2022, we issued 266,667 shares of Common Stock based on a subscription price of $0.75 per share with an aggregate value of $200,000. These shares were issued in reliance on Section 4(a)(2) of the Securities Act.
On January 20, 2022, we issued 200,000 shares of Common Stock based on a subscription price of $0.75 per share with an aggregate value of $150,000. These shares were issued in reliance on Section 4(a)(2) of the Securities Act
On March 23, 2022, we issued 1,000,000 shares of Common Stock based on a subscription price of $0.75 per share with an aggregate value of $750,000. These shares were issued in reliance on Section 4(a)(2) of the Securities Act.
20
On April 18, 2022, we issued 266,667 shares of Common Stock based on a subscription price of $0.75 per share with an aggregate value of $200,000. These shares were issued in reliance on Section 4(a)(2) of the Securities Act.
NOTE 10 – LEASES
A lease is defined as a contract that conveys the right to control the use of identified tangible property for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASC Topic 842 which primarily affected the accounting treatment for operating and finance lease agreements in which the Company is the lessee including Company leases of vehicles and equipment for use in the storm and disaster recovery work. The Company elected to not recognize ROU assets and lease liabilities arising from short-term leases with initial lease terms of twelve months or less (deemed immaterial) on the accompanying consolidated balance sheets.
ROU assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on the effective interest plus: for finance type leases, straight-line amortization of the asset’s original ROU over its lease term; or, for operating leases, the effective amortization on the lease liability. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.
When measuring lease liabilities for leases that were classified as operating and financing leases as of January 1, 2019, NSR LLC discounted lease payments using its estimated incremental borrowing rate of 10% at January 1, 2019. Since April 1, 2020, MM has entered into operating leases using its incremental borrowing rate of 4% to discount lease payments.
The following table presents supplemental lease information:
Lease cost Finance lease cost
Three Months Ended
Six Months Ended
July 2, 2022
July 3, 2021
$ 17,792 5,055 26,712 114,631 $164,190
$ 23,366 $ 26,712
July 2, 2022
$ 35,585 6,773 139,195 163,471 $345,204
$46,733 $ 139,195
1.3 years 3.8 years
10.0% 4.3%
July 3, 2021
$ 35,585 10,561 65,005 _226,432 $337,583
$46,733 $ 65,005
2.3 years 6.0 years
10.0% 4.1%
Amortization on ROU assets $ 17,792
Interest on lease liabilities 3,138 Operating lease cost 69,598 Short-term lease cost 119,251 Total lease cost $209,779
Cash paid for amounts included in the measurement of lease liabilities for:
Finance leases:
Financing cash flows $ 23,366
Operating leases:
Operating cash flows $ 69,598
Weighted-average remaining lease term: Finance leases
Operating leases Weighted-average discount rate:
Finance leases Operating leases
Supplemental balance sheet information related to leases is as follows:
Assets:
Operating lease assets Finance lease assets Total leased assets
Financial Statement Line Item
ROU asset
July 2, 2022
754,107 92,930 847,037
Jan 1, 2022
$ $
$ $
848,840 128,515 977,355
21
Liabilities: Current:
Operating lease assets Finance lease assets
Non-current
Operating lease assets Finance lease assets
$
163,364 48,586 211,950
590,742 63,406 654,149 866,099
$
$
183,874 65,312 249,186
664,966 86,639 751,605 1,000,791
Total lease liabilities
$
Finance 30,361
Current portion of lease liability
Lease liabilities, net of current portion
As of July 2, 2022, remaining maturities of lease liabilities were as follows:
2022
2023
2024
2025
2026
2027
Total
Amount representing interest Lease liability
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Legal Claims
$
$
Operating 104,404
and thereafter
54,172 40,629 - - - $ 125,163 (13,170) $ 111,993
168,570 139,469 107,969 106,553 220,235 847,200 (93,094)
$
$ 754,106
The Sustainable Green Team, LTD is currently involved in arbitration with Emerging Markets Consulting, LLC (“EMC”), a former service provider of the Company. On October 21, 2020, EMC initiated arbitration against the Company, alleging, among other things, breach of contract related to an agreement entered into between the Company (via NSR LLC) and EMC, in which the Company engaged EMC to provide it with consulting services related to the Company’s capital structure, investor relations strategies, and fundraising plans, including the filing of an S-1 registration statement at some point in the future, in exchange for equity compensation in the Company. EMC seeks relief against the Company in the form of the equity compensation pursuant to the agreement (2,000,000 shares of the Company’s Common Stock) and damages. The Company denies EMC’s allegations, and has also initiated counterclaims against EMC for breach of the agreement by EMC, in which it is seeking damages resulting from EMC’s breach of its duties under the agreement.
In addition, the Company named in its counterclaim to EMC’s claim another similar service provider, Rainmaker Group Consulting, LLC (“Rainmaker”), as a pre-emptive defense against any actions brought by Rainmaker against the Company. Rainmaker engaged by the Company in 2019 to provide similar consulting services as EMC was engaged to provide in exchange for the same compensation (2,000,000 shares of the Company’s Common Stock). The Company alleges that Rainmaker breached its agreement with the Company by not providing the services provided in the agreement between the Company and Rainmaker, and therefore Rainmaker is not entitled to any equity compensation by the Company. The Company has taken this action as a defensive measure against potential (in the Company’s opinion) frivolous lawsuits brought by Rainmaker against the Company.
The Company is confident it will prevail in the ongoing arbitration described above being overseen by the American Arbitration Association.
On March 25, 2021, the Company filed a civil complaint in the Ninth Judicial Circuit Court in Orange County, Florida against Ralph Spencer, the former owner and CEO of Mulch Manufacturing, Inc., alleging certain tortious interference with the Company’s business operations and dealings. On April 1, 2021, the Company was granted an Emergency Temporary Injunction by the Ninth Judicial Circuit Court in Orange County, Florida enjoining Mr. Spencer from, among other things, further attempts to interfere with the Company’s business operations. On August 16, 2021, the Company settled this dispute and has released Ralph Spencer from the Emergency Temporary Injunction.
The Company agreed to pay Spencer $25,650,000 plus interest as follows:
22
(a) issuing Spencer a promissory note in the amount of $10,650,000 accruing interest at 6% per annum secured by four properties located in Florida and another in Georgia (the “Settlement Note”). The Settlement Note is amortized monthly over 20 years with a balloon payment of any outstanding balance on its third anniversary. The Company is current on all Settlement Note obligations as of the date of this Prospectus.
(b) paying Spencer a total of $15,000,000 in exchange for the redemption of Spencer’s 40,000,000 shares of common stock and any and all ownership interests in which he may have or claim (the “Redemption Payment”). The Redemption Payment is to be paid to Spencer according to the following schedule: (i) $3,300,000 on October 15, 2021 in exchange for 8,797,800 common stock shares; and (ii) twenty-four (24) payments of $487,500 on the 15th of each month, commencing November 15, 2021, each for 1,300,091.67 common stock shares. Spencer executed a letter of instruction to the Company’s transfer agent, Pacific Stock Transfer, and provided all shares to the transfer agent to allow for the immediate redemption upon each payment. The Company and Spencer are current on all Redemption Payment obligations as of the date of this Prospectus.
On April 18, 2022, the Company filed a second civil complaint in the Ninth Judicial Circuit Court in Orange County, Florida against Ralph Spencer, the former owner and CEO of Mulch Manufacturing, Inc., alleging certain tortious interference with the Company’s business operations and dealings. On June 23, 2022, the Company was granted an Emergency Temporary Injunction by the Ninth Judicial Circuit Court in Orange County, Florida enjoining Mr. Spencer from, among other things, further attempts to interfere with the Company’s business operations. The Company is currently attempting mediation regarding this matter and the obligations owed Mr. Spencer (see Note 8 Notes Payable and above in Note 11 relating to promissory note and stock redemptions). Should this mediation fail, the Company is confident it will receive a favorable judgment in the civil complaint filed against Mr. Spencer related to these matters.
Stock Redemptions
The Company is committed to buying back 40,000,000 shares of its common stock over 24 months beginning in October, 2021, at a price of $0.375 per share.
NOTE 12 – CONCENTRATION OF CREDIT RISK
Cash Deposits
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. As of July 2, 2022, the Company did not have any deposit amounts in excess of the FDIC insured limit.
Revenues
For the three and six months ended July 2, 2022, one customer accounted for 22% and 22% of revenue, respectively. For the three and six months ended July 3, 2021, one customer accounted for 21% and 22% of revenue, respectively.
Accounts Receivable
As of July 2, 2022, one customer accounted for 32% of the Company’s accounts receivable. As of January 1, 2022, one customer accounted for 24% of the accounts receivable.
NOTE 13 – SUBSEQUENT EVENTS
The Company entered into a restricted sub-license agreement on August 9, 2022 with an innovative soil technology company (‘Licensor), whereby the Company will receive Inputs from the Licensor. The Inputs provided will allow the Company to manufacture soil products from its existing and future fiber products. The sub-license agreement called for the Company to issue 500,000 shares of its common stock to the Licensor upon the signing of the agreement and two subsequent payments of $500,000 each, with the first payment due within the calendar year 2022 and the second payment within the calendar year 2023.
23
1)
Disclosure Statement Pursuant to the Pink Basic Disclosure Guidelines
THE SUSTAINABLE GREEN TEAM, LTD
A Delaware corporation
24-200 County Road Astatula, FL 34705
Telephone: (407) 886-8733
Corporate Website: www.thesustainablegreenteam.com Corporation Email: info@nationalarborcare.com
SIC:0783
Quarterly Report
For the Period Ending: July 2, 2022 (the “Reporting Period”)
As of July 2, 2022, the number of shares outstanding of our Common Stock was 85,693,299.
As of the prior quarter ending April 2, 2022, the number of shares outstanding of our Common Stock was 88,026,816.
As of the most recent completed fiscal year ended January 1, 2022, the number of shares outstanding of our Common Stock was 90,460,425.
Indicate by check mark whether the company is a shell company (as defined in Rule 405 of the Securities Act of 1933 and Rule 12b-2 of the Exchange Act of 1934):
Yes: No:
Indicate by check mark whether the company’s shell status has changed since the previous reporting period:
Yes: No:
Indicate by check mark whether a Change in Control of the company has occurred over this reporting period:
Yes: No:
Name and address(es) of the issuer and its predecessors (if any).
The immediate predecessor of The Sustainable Green Team, Ltd., a Delaware corporation (the “Company”, “we”, “us”, “our”, or “SGTM”) was National Storm Recovery, Inc. (“NSRI”), a Wyoming corporation, which held all of the membership interests in National Storm Recovery, LLC (“NSR LLC”), a Florida limited liability company. The management team of NSRI determined that it was in the best interest of the Company and its shareholders to change domiciles for both NSRI and NSR LLC to the State of Delaware for the purpose of reorganizing the Company and its operations into a holding company structure, pursuant to Delaware General Corporation Law (“DGCL”) §251(g). In December 2019, NSRI and NSR LLC were re-domiciled to the State of Delaware. After the domicile changes, NSRI incorporated SGTM as a wholly owned subsidiary and NSR LLC issued membership interests to SGTM. SGTM then incorporated Sierra Gold Merger Corp. (“SGMC”) as its wholly owned subsidiary. With each of the new corporations formed, NSRI merged down into SGMC, with SGMC surviving as a wholly owned subsidiary of SGTM. The assets and liabilities of NSRI were succeeded to by SGMC. As part of the merger agreement, the issued and outstanding shares of NSRI were exchangeable into shares of SGTM on a one for one basis. Similarly, the equity securities held by NSRI in SGTM and NSR LLC were
1 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
canceled under the terms of the merger agreement leaving SGTM as the sole shareholder and member of SGMC and NSR LLC, respectively. The Company obtained Financial Industry Regulatory Authority (“FINRA”) approval and published a press release announcing the forgoing and allowing the Company to trade under the name “The Sustainable Green Team, Inc.” and new trading symbol, SGTM.
Currently, the Company is incorporated and in good standing in the State of Delaware under the name The Sustainable Green Team, Ltd., the Company’s original predecessor was incorporated in the State of Nevada on January 22, 1997 under the name Alpha Diamond Corporation. The Company changed its name to African Resources on June 28, 1998, to Viking Exploration, Inc. on April 9, 1999 and then to Sierra Gold Corporation on July 12, 2006. Then on February 15, 2011, Sierra Gold Corporation changed its domicile to the State of Wyoming by filing Articles of Continuance with the Wyoming Secretary of State. On July 22, 2019 the Company changed its name to National Storm Recovery, Inc. by filing a Certificate of Amendment with the Wyoming Secretary of State’s office. The Company then notified the Financial Industry Regulatory Authority (“FINRA”) of its name change, as well as the resolution it had passed to effect a 1:10,000 reverse stock split and, as part of its name change, effected a voluntary change in its trading symbol, all of which were approved for announcement by FINRA on or about August 22, 2019. Finally, the Company changed domiciles to the State of Delaware by filing a Certificate of Conversion and Certificate of Incorporation with the Delaware Division of Corporations, Secretary of State’s office on December 30, 2019 as part of its plan to reorganize into a holding company pursuant to DGCL§251(g). The Company has now changed its name to The Sustainable Green Team, Ltd. and trading symbol to SGTM after obtaining FINRA approval on July 21, 2020.
Describe any trading suspension orders issued by the SEC concerning the issuer or its predecessors since inception: None.
List any stock split, stock dividend, recapitalization, merger, acquisition, spin-off, or reorganization either currently anticipated or that occurred within the past 12 months:
In November, 2021, the Board of Directors has deemed it to be in the best interests of the Corporation and its stockholders to effect, a reverse stock split of its common stock, par value $0.0001 per share (“Common Stock”), whereby a certain number of issued and outstanding shares of Common Stock will be combined into one new share of Common Stock, with any resulting fractional shares of Common Stock to be rounded up to the next nearest whole share of Common Stock, with no change to the authorized shares of Common Stock, with such reverse split to be in a range as determined by the Board following approval of such reverse split and granting of authority by the shareholders of the Corporation, subject to being in the range of a ratio between 1 share of Common Stock for each 2 outstanding shares of Common Stock, to 1 share of Common Stock for each 10 outstanding shares of Common Stock (the “Reverse Split”), resulting in a cost savings to the Corporation. As of the date of this filing, the reverse-split has yet to be approved.
The address(es) of the issuer’s principal executive office: 24200 County Road, Astatula, FL 34705 The address(es) of the issuer’s principal place of business:
Check box if principal executive office and principal place of business are the same address: ?
Has the issuer or any of its predecessors been in bankruptcy, receivership, or any similar proceeding in the past five years? Yes: ? No: ?
If this issuer or any of its predecessors have been the subject of such proceedings, please provide additional details in the space below:
N/A
2 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
2) Security Information
Trading symbol:
Exact title and class of securities outstanding: CUSIP:
Par or stated value:
Total shares authorized:
Total shares outstanding:
Number of shares in the Public Float1: Total number of shareholders of record:
SGTM Common Stock 86934B $0.0001
245,000,000 as of date: July 2, 2022 85,693,299 as of date: July 2, 2022 601,836 as of date: July 2, 2022 171 as of date: July 2, 2022
All additional class(es) of publicly traded securities (if any):
Trading symbol:
Exact title and class of securities outstanding: CUSIP:
Par or stated value:
Total shares authorized:
Total shares outstanding:
Transfer Agent
as of date: as of date:
Name: Phone: Email: Address:
Pacific Stock Transfer Company (702) 361 - 3033
Joslyn@pacificstocktransfer.com
6725 Via Austi Parkway, Suite 300, Las Vegas, Nevada 89119
Is the Transfer Agent registered under the Exchange Act?2 Yes: ? No: ?
3) Issuance History
The goal of this section is to provide disclosure with respect to each event that resulted in any direct changes to the total shares outstanding of any class of the issuer’s securities in the past two completed fiscal years and any subsequent interim period.
Disclosure under this item shall include, in chronological order, all offerings and issuances of securities, including debt convertible into equity securities, whether private or public, and all shares, or any other securities or options to acquire such securities, issued for services. Using the tabular format below, please describe these events.
A. Changes to the Number of Outstanding Shares
1 “Public Float” shall mean the total number of unrestricted shares not held directly or indirectly by an officer, director, any person who is the beneficial owner of more than 10 percent of the total shares outstanding (a “control person”), or any affiliates thereof, or any immediate family members of officers, directors and control persons.
2 To be included in the Pink Current Information tier, the transfer agent must be registered under the Exchange Act.
3 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
Check this box to indicate there were no changes to the number of outstanding shares within the past two completed fiscal years and any subsequent periods: ?
Shares Outstanding as of Second Most Recent Fiscal Year End:
Opening Balance
Date: December 31, 2019 Common: 43,752,636
Date of Transaction
Transact ion type (e.g. new issuance , cancellat ion, shares returned to treasury)
Number of Shares Issued (or cancelle d)
Class of Securiti es
Value of shares issued ($/per share) at Issuanc e
Were the shares issued at a discount to market price at the time of issuance? (Yes/No)
Individu al/ Entity Shares were issued to (entities must have individu al with voting / investm ent control disclose d).
Reason for share issuanc e (e.g. for cash or debt conversi on)
-OR- Nature of Services Provided
Restricted or Unrestrict ed as of this filing.
Exemption or Registratio n Type.
1/31/2020 New 40,000,0001 Common $0.15 No Ralph Exchange Restricted
4(a)2 4(a)2
4(a)2
4(a)2
4(a)2
4(a)2 4(a)2 4(a)2
4(a)2
4(a)2 4(a)2
4(a)2
Stock
Common $0.33 Stock
Common $0.80 Stock
Common
Stock $0.24
Commo $0.35 n Stock
Common $0.40 Stock
Common $0.40 Stock
Common $0.58 Stock
Common
Stock $1.06
Common $1.15 Stock
Common $0.62 Stock
Common
Stock $0.75
4 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
Spencer
2/26/2020
4/1/2020 4/9/2020 5/14/2020
5/20/2020
5/20/2020 6/12/2020
1/13/2021
3/5/2021 8/26/2021
10/4/21
New 4,000,000 2,
Cancellation (1,000,000)1,4
New 1,000,000
New 25,0005
New 250,000 New 786,045 New 354,724
New 300,000
New 25,000 New 6,000,000
New 125,000
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Thistle Investments LLC, Jodi Stevens3
Ralph Spencer
Tony Eveland
GHS Investments LLC, Sarfraz Hajee6
Tony Eveland
Tony & Dana Eveland
Kent Hamill & Cathy Hamill
Kent Hamill & Cathy Hamill
John Schultz
John Spencer
First Apex International Inc7
In connection with Sierra Exchange
Exchange
Subscriptio n
In connection with Sierra Exchange
Subscriptio n
Debt conversion
Debt conversion
Prior Year Loan Incentive
Compensation
Debt conversion
Compensation
Restricted
Restricted Restricted
Restricted
Restricted Restricted
Restricted Restricted
Restricted Restricted
Restricted
OTC Markets Group Inc.
10/15/21 Cancellation
10/22/21 New 10/22/21 New
10/22/21 New
11/15/21 Cancellation 11/29/21 New 11/29/21 New 11/29/21 New 11/29/21 New 11/29/21 New 11/29/21 New 11/29/21 New
12/2/21 New 12/15/21 Cancellation 12/30/21 New 12/31/21 New
1/13/22 New 1/19/22 Cancellation
1/21/22 New 2/17/22 Cancellation 3/15/22 Cancellation
3/23/2022 New 04/15/22 Cancellation
04/18/22 New 05/12/22 Cancellation
(8,797,800) Common Stock
300,000 Common Stock
1,000,000 Common Stock
133,333 Common Stock
(1,300,092) Common Stock
800,000 Common Stock
66,667 Common Stock
2,000,000 Common Stock
100,000 Common Stock
66,667 Common Stock
106,670 Common Stock
66,667 Common Stock
1,000,000 Common Stock
(1,300,092) Common Stock
200,000 Common Stock
400,000 Common Stock
266,667 Common Stock
(1,300,092) Common Stock
200,000 Common Stock
(1,300,092) Common Stock
(1,300,092) Common Stock
1,000,000 Common Stock
(1,300,092) Common Stock
266,667 Common Stock
(1,300,092) Common Stock
$0.15
$0.75 $0.75
$0.75
$0.15 $0.75 $0.75 $0.75 $0.75 $0.75 $0.75 $0.75 $0.75 $0.15 $1.12 $9.24
$0.75
$0.15 $0.75 $0.15 $0.15 $0.75 $0.15
$0.75 $0.15
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Ralph Spencer
Charles & Lisa Roberts
Leslie Schultz
Todd Hoepker Revocable Trust8
Ralph Spencer
Charles & Lisa Roberts
Christopher Lahiji
Leslie Schultz
Philip Simeone
Quick 9 Capital, LLC
Ryan Nilsen
Ryan Polk
Leslie Schultz
Ralph Spencer
Victor Spangler
Charles Lepinski
Todd Hoepker Revocable Trust8
Ralph Spencer
Charles & Lisa Roberts
Ralph Spencer
Ralph Spencer
Leslie Schultz
Ralph Spencer
Todd Hoepker Revocable Trust8
Ralph Spencer
Exchange
Subscription
Subscription
Subscription
Exchange
Subscription
Subscription
Subscription
Subscription
Subscription
Subscription
Subscription
Subscription
Exchange
Exchange
Equipment Purchase
Subscription
Exchange
Subscription
Exchanges
Exchange
Subscription
Exchange
Subscription
Exchange
Restricted
Restricted Restricted
Restricted
Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted
Restricted
Restricted Restricted Restricted Restricted Restricted Restricted
Restricted Restricted
4(a)2
4(a)2 4(a)2
4(a)2
4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2
4(a)2
4(a)2 4(a)2 4(a)2 4(a)2 4(a)2 4(a)2
4(a)2 4(a)2
5 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
Shares Outstanding on
Date of This Report: 85,693,299
Ending Balance:
Date: July 2, 2022 Common: 85,693,299
Example: A company with a fiscal year end of December 31st, in addressing this item for its quarter ended June 30, 2021, would include any events that resulted in changes to any class of its outstanding shares from the period beginning on January 1, 2019 through June 30, 2021 pursuant to the tabular format above.
Use the space below to provide any additional details, including footnotes to the table above:
1. These shares were issuable as of the date of the share exchange pursuant to the Business Combination Agreement between the Company, Mulch Manufacturing, Inc. an Ohio corporation and the sole exchanging shareholder of Mulch Manufacturing, Inc., Ralph Spencer. Also in connection with the issuance of these shares, the shares granted earlier were cancelled in accordance with the Business Combination Agreement that was executed by and among the parties thereto. The shares were due to Mr. Spencer on closing notwithstanding the fact that they were actually issued thereafter.
2. 4 million shares were issued during the period under the Amended and Restated Share Purchase and Equity Exchange Agreement dated to be effective as of December 31, 2019 in connection with the change of control of Sierra Gold Corporation.
3. Jodi Stevens has sole dispositive power over the shares.
4. These shares were canceled in accordance with the Business Combination Agreement that was executed by and among the parties
effective 1/31/20.
5. These shares were issued in connection with the change of control of Sierra Gold Corporation.
6. Sarfraz Hajee has sole dispositive power over the shares.
7. Scott Biddick has sole dispositive power over the shares.
8. Todd Hoepker has sole dispositive power over the shares.
9. Eilon Natan has sole dispositive power over the shares.
B. Debt Securities, Including Promissory and Convertible Notes
Use the chart and additional space below to list and describe all outstanding promissory notes, convertible notes, convertible debentures, or any other debt instruments that may be converted into a class of the issuer’s equity securities.
Check this box if there are no outstanding promissory, convertible notes or debt arrangements: ?
Date of Note Issuance
Outstanding Balance ($)
Principal Amount at Issuance ($)
Interest Accrued ($)
Maturity Date
Conversion Terms (e.g. pricing mechanism for determining conversion of instrument to shares)
Name of Noteholder (entities must have individual with voting / investment control disclosed).
Reason for Issuance (e.g. Loan, Services, etc.)
9/25/18
$170,410
342,550
5% APR
11/1/2023
Not convertible
Ogden’s Incorporated Stephen Ogden
Purchase of Business
8/16/21 $10,438,353 $10,650,000 6% APR 8/16/24 Not convertible Ralph T Spencer Purchase of Real Estate
Use the space below to provide any additional details, including footnotes to the table above:
* The debt securities listed in this table represent the outstanding obligations of the Company and its subsidiaries on a consolidated basis as of the date of this Quarterly Report. The Company has not listed any notes payable in connection with traditional equipment financing, which is considered part of the
Company’s ordinary course of business.
6 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
4)
A.
B.
Financial Statements
The following financial statements were prepared in accordance with: ? U.S. GAAP
? IFRS
The financial statements for this reporting period were prepared by (name of individual)3:
Name:
Title:
Relationship to Issuer:
Michael J Mete, CPA CFO
Employee
Provide the financial statements described below for the most recent fiscal year or quarter. For the initial disclosure statement (qualifying for Pink Current Information for the first time) please provide reports for the two previous fiscal years and any subsequent interim periods.
C. Balance Sheet—Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the period ending July 2, 2022 posted separately on OTC Markets on August 22, 2022.
D. Statement of Income -– Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the periods ending July, 2022 posted separately on OTC Markets on August 22, 2022.
E. Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the periods ending July 2, 2022 posted separately on OTC Markets on August 22, 2022.
F. Statement of Changes in Shareholders’ Equity – Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the period ending July 2, 2022 posted separately on OTC Markets on August 22, 2022.
G. Financial Notes – Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the period ending July 2, 2022 posted separately on OTC Markets on August 22, 2022.
You may either (i) attach/append the financial statements to this disclosure statement or (ii) file the financial statements through OTCIQ as a separate report using the appropriate report name for the applicable period end. (“Annual Report,” “Quarterly Report” or “Interim Report”).
If you choose to publish the financial statements in a separate report as described above, you must state in the accompanying disclosure statement that such financial statements are incorporated by reference. You may reference the document(s) containing the required financial statements by indicating the document name, period end date, and the date that it was posted to OTCIQ in the field below. Financial Statements must be compiled in one document.
Financial statement information is considered current until the due date for the subsequent report (as set forth in the qualifications section above). To remain qualified for Current Information, a company must post its Annual Report within 90 days from its fiscal year-end date and Quarterly Reports within 45 days of each fiscal quarter-end date.
5)
Issuer’s Business, Products and Services
A. Summary of the Company’s Business Operations:
The Sustainable Green Team, Ltd., together with its subsidiaries Sierra Gold Merger Corp., National Storm Recovery, LLC and Mulch Manufacturing, Inc., is a vertically integrated, next generation mulch manufacturing company, whose operations begin with the acquisition of wood-based, feedstock and other natural materials used for its next-generation mulch products. The acquisition of its feedstock is a significant, differentiating, factor of the Company’s operations that sets it apart from and is not shared by its competitors, in that: i) its operations, including the strategic partnership that it has with a large waste management company, have a positive impact on the
3 The financial statements requested pursuant to this item must be prepared in accordance with US GAAP or IFRS by persons with sufficient financial skills.
7 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
environment; and ii) the acquisition process for its feedstock is an additional source of revenue for the Company. All companies that produce and sell mulch require for their production, feedstock material from which they produce their final products. For those companies who produce wood-based mulch, the acquisition of their feedstock, like lumber production, has historically been centered on harvesting trees or sourcing their supply; and for those manufacturers, gross margins generally, are materially affected by, if not dependent on, an ability to secure consistent low cost supplies of tree material/ wood.
Through its wholly owned subsidiary, National Storm Recovery, LLC, the Company operates its tree services division that provides tree trimming and maintenance services, hauling, removal, disposal, collection and storage of tree debris generated by its maintenance and its disaster recovery and clean-up services. The Company’s mulch products have also been manufactured for sale under National Storm Recovery, LLC. These operations will be handled under Mulch Manufacturing, Inc., an Ohio corporation.
B. Description of the Constituent Entities of the Company:
Currently incorporated and in good standing in the State of Delaware under the name “The Sustainable Green Team, Ltd.”, the Company’s original predecessor was originally incorporated in the State of Nevada on January 22, 1997 under the name Alpha Diamond Corporation. The Company changed its name to African Resources on June 28, 1998 to Viking Exploration, Inc. on April 9, 1999 and then to Sierra Gold Corporation on July 12, 2006. Then on February 15, 2011 Sierra Gold Corporation changed its domicile to the State of Wyoming by filing Articles of Continuance with the Wyoming Secretary of State. Thereafter, on July 22, 2019 in preparation for an anticipated share/equity exchange with National Storm Recovery, LLC, the Company changed its name to National Storm Recovery, Inc., by filing a Certificate of Amendment with the Wyoming Secretary of State’s office. The Company then notified the Financial Industry Regulatory Authority (“FINRA”) of its name change, as well as the resolution it had passed to affect a 1:10,000 reverse stock split and as part of its name change, effected a voluntary change in its trading symbol, all of which were approved for announcement by FINRA on or about August 22, 2019. The Company changed domiciles to the State of Delaware by filing a Certificate of Conversion and Certificate of Incorporation with the Delaware Division of Corporations, Secretary of State’s office on December 30, 2019 as part of its plan to reorganize into a holding company pursuant to DGCL §251(g) as previously contemplated and agreed to by Sierra Gold Corporation and National Storm Recovery, LLC in their Amended and Restated Share Purchase and Equity Exchange Agreement, and in anticipation of a transaction with Mulch Manufacturing, Inc. The Company has changed its name to The Sustainable Green Team Ltd and trading symbol to SGTM in connection with its reorganization into a holding company pursuant to DGCL §251(g), after obtaining FINRA approval and has formally announced this action.
National Storm Recovery, Inc., a Wyoming corporation, previously known as Sierra Gold Corporation, a Wyoming corporation, executed a share/membership exchange agreement with the managing member of National Storm Recovery, LLC, a Florida corporation, as a path for National Storm Recovery, LLC to become publicly traded. Following, execution of that agreement and prior to closing, the Managing Member of National Storm Recovery, LLC, and National Storm Recovery, Inc. each agreed that the business plan and operations of National Storm Recovery, LLC could be accommodated best with the publicly traded company (its successor The Sustainable Green Team, Ltd.), as the parent corporation and the operating companies, as wholly owned subsidiaries. This is best accomplished under Delaware General Corporation Law (“DGCL”) §251(g) for three primary reasons. First because Delaware has a specific statute that provides for the exact process and structure that is needed; Second, because it ensures that there are no contingent and unrecorded liabilities that could impact new investors. Third, because the management’s business plan calls for expansion that comes, in part, from strategic acquisitions with companies that are both accretive to earnings and that are positioned for rapid growth from the synergistic opportunities that management identifies. One of the requirements of DGCL§251(g) is that each of the entities must be a Delaware entity and the corporations must have certificates of incorporation that are the same as each other. Therefore, the information provided in this report regarding securities will be the same for each entity, even for National Storm Recovery, LLC, although the statute does not specifically require this. Thus the shares of National Storm Recovery, Inc. issued and outstanding prior to the reorganization will be the same number of issued and outstanding shares for The Sustainable Green Team, Ltd. and shareholders may begin exchanging their shares for shares of The Sustainable Green Team, Ltd.
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OTC Markets Group Inc.
Effect of DGCL §251(g) in Doing Business with the Company and on Trading of Common Stock.
As of the date of this report, the holding company structure has been approved and all of the requirements under DGCL §251(g) have been met so the Company has already taken each of the steps required under state law to legally effect that reorganization. Therefore, as a matter of law, The Sustainable Green Team, Ltd. is the successor publicly traded company. Thus for purposes of transacting business with the Company, the proper name (and actual entity) is, and will continue to be from this point on, The Sustainable Green Team, Ltd. (note that the Secretary of State’s Office in Delaware ignores “the” as the first word in a company name, but the Certificate of Incorporation states it is “The” Sustainable Green Team, Ltd.. The Delaware Secretary of State’s Office has processed: 1.) the change in corporate domiciles of National Storm Recovery, Inc., a Wyoming corporation to National Storm Recovery, Inc. a Delaware corporation (which was required in order to work under and apply Delaware law); 2.) the change in domiciles of National Storm Recovery, LLC, a Florida limited liability company to National Storm Recovery, LLC, a Delaware limited liability company (which was required in order to work under and apply Delaware law); 3.) the incorporation of The Sustainable Green Team, Ltd., a Delaware corporation and Sierra Gold Merger Corp., a Delaware corporation and 4.) the Certificate of Merger under DGCL §251(g) for National Storm Recovery, Inc. a Delaware corporation. Therefore, with the forgoing processed, the reorganization has been completed and anyone wishing to enter into an agreement with the parent publicly traded company will enter into it with “The Sustainable Green Team, Ltd.” The shares of National Storm Recovery, Inc., formerly a Wyoming corporation, that are trading in the market and any that were or are subsequently issued will be exchanged for shares of The Sustainable Green Team, Ltd. on a one for one basis.
Pre-DGCL §251(g) Reorganization
National Storm Recovery, Inc., formerly a Wyoming corporation, is the beneficial owner of National Storm Recovery, LLC, a Florida limited liability company.
Post-DGCL §251(g) Reorganization
The Sustainable Green Team, Ltd. holds three subsidiaries, Sierra Gold Merger Corp., National Storm Recovery, LLC and Mulch Manufacturing, Inc., which was acquired effective January 31, 2020.
Mulch Manufacturing, Inc.
For a description of Mulch Manufacturing, Inc.’s facilities, see Section 6 of this Quarterly Report.
Day Dreamer Productions, LLC
The Company acquired 100% of the membership interests in Day Dreamer Productions, LLC (DDP), a Florida LLC, on December 30, 2021, by issuing 200,000 shares of common stock. DDP provides videography services for documentaries and promotional projects. The Company uses DDP for its own promotions and documentation and intends to offer these services to outside organizations.
Beaver, Washington Real Estate
On March 18, 2022, the Company closed on the Beaver, Washington real estate property for $1,025,475, of which, $200,000 was previously put down as deposits, and $825,475 was paid at closing. The acquisition of the Beaver, Washington sawmill was closed in December 2021. We expect to begin producing pine bark and marketable lumber at the Beaver mill in 2024.
C. Description of the Company and its Subsidiaries’ Principal Products, Services and Markets:
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The Company operates primarily through its wholly owned operating subsidiaries. The principal products of each of the Company’s operating subsidiaries is described below.
National Storm Recovery, LLC
National Storm Recovery, LLC (DBA Central Florida ArborCare) was initially founded to provide tree maintenance, disaster recovery, debris hauling, removal, and disposal services. Each of these services is provided to residential, commercial and governmental customers and was structured to drive revenue for the company. Examples include the company’s multi-year contract with the Town of Oakland, Florida, (an area known for its large old oak trees), for emergency debris hauling and tree removal; and its multi-year contract with the Orange County Florida School District, (covering 267 properties, that includes schools, administrative sites and maintenance facilities) for tree removal, trimming and maintenance services. In each case, these contracts are renewable following their initial multi-year terms with aggregate terms of five years.
During its first year in operation, National Storm Recovery, LLC continued to build positive momentum under its CEO, Anthony J. Raynor’s leadership, when it entered into an agreement for the acquisition of certain complementary assets owned by Central Florida Arbor Care. Building this earlier success, in 2019, the company began to expand its business plan to include the complementary vertical market of mulch manufacturing. In order to expedite this plan of building a completely vertically integrated company and having identified a substantial number of advantages with being publicly traded, the company decided to bring its business to the public markets; and in the 2019, executed a share purchase and equity exchange agreement as part of the series of transactions related to the “reverse takeover.”
One of the Company’s over-arching strengths, in addition to management’s scores of years of industry experience, is management’s ability to build and manage teams. The importance of its relationships with employees, independent contractors, customers, vendors and anyone else with whom they interact, cannot be overstated. Although management believes its industry expertise, competence and reliability are each important factors, ultimately its commitment to its employees, independent contractors and the belief that they are all important members of its “Sustainable Green Team” have been significant contributing factors to being provided opportunities in every market entered. . Each of the opportunities received and the ways in which they have been managed, have also contributed to the Company’s positive momentum, helping shape management’s ultimate vision for the Company as a fully integrated mulch manufacturing and sales company, with operations that make sound business sense and create a positive environmental impact.
Again, National Storm Recovery, LLC was established as a company to provide tree maintenance, disaster recovery, debris hauling, removal, and disposal services – services that provide it with access to a large amount of wood or tree debris. Thought of from a different perspective, the Company has access to a large amount of “feedstock” that is required to manufacture wood based mulch products. But, unlike traditional wood-based mulch manufacturers who purchase their feedstock, the Company is paid to cut it, paid to haul it and paid to dispose of it. Its cost, in that limited equation, was its own disposal cost. However, by processing the tree material into mulch and selling it, the Company:
i) eliminates its disposal costs,
ii) receives the feedstock it would need as a mulch manufacturer, for free,
iii) does not have to police its suppliers to ensure responsible tree harvesting, because the trees and material the company handles are either from trees and branches downed in storms or cut as part of the care and maintenance of the trees it is paid to care for, and
iv) has a “cost structure” for its feedstock that is even better that a competitor that secures feedstock using unscrupulous or irresponsible harvesting methods and/or sources.
So, by grinding, screening and packaging the tree material that it is already receiving (and is paid to receive), the Company is able to leverage its existing activities, create additional value, and position itself to substantially increase its overall revenue and earnings prospects; and decrease the burden that this material would otherwise place on the local landfills or collection sites.
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6)
Sierra Gold Merger Corp.
There are no operations under The Sustainable Green Team, Ltd.’s subsidiary Sierra Gold Merger Corp. Notwithstanding the fact that the applicable statutes of limitations have expired for any foreseeable claims that could have been made based on the assets and liabilities last disclosed many years ago by Sierra Gold Corporation, Sierra Gold Merger Corp. was formed as part of the Company’s corporate organizational shift into a parent-subsidiary structure with discrete operations contained in separate subsidiaries. This parent subsidiary structure was affected pursuant to DGCL §251(g) and has the additional benefit of allowing any legacy issues (such as contingent liabilities, unrecorded liabilities and any other issues involving the prior business or activities of Sierra Gold Corporation) to remain isolated in the wholly owned subsidiary, Sierra Gold Merger Corp., so that they do not affect assets or the operations of any other entity.
Mulch Manufacturing, Inc.
Mulch Manufacturing, Inc. (“MM”) is a large producers of packaged mulch products in the United States. It harvests the raw materials, processes the mulch at several locations, packages it and ships it when required in its own fleet of trucks or by contract carriers. MM’s products are distributed through the largest of mass merchandisers as well as small independent retailers. MM provides customer service and sales support to the retailer as well as the end user.
Day Dreamer Productions, LLC
Day Dreamer Productions, LLC provides videography services for clients producing documentary and promotional services. Much of its work has been for the Company and its subsidiaries.
Issuer’s Facilities
The goal of this section is to provide a potential investor with a clear understanding of all assets, properties or facilities owned, used or leased by the issuer and the extent in which the facilities are utilized.
In responding to this item, please clearly describe the assets, properties or facilities of the issuer, give the location of the principal plants and other property of the issuer and describe the condition of the properties. If the issuer does not have complete ownership or control of the property (for example, if others also own the property or if there is a mortgage on the property), describe the limitations on the ownership.
If the issuer leases any assets, properties or facilities, clearly describe them as above and the terms of their leases.
For purposes of this section, unless otherwise noted, references to the “Company” refer to The Sustainable Green Team, LTD and its wholly-owned subsidiaries on a consolidated basis.
Principal Executive Offices
Currently the Company’s principal executive offices are located at 24-200 County Road 561, Astatula, FL 34705. The Company owns these premises, which are approximately 5,000 square feet. The premises are described more fully below (under “Astatula, Florida Site”). and are described below.
Astatula, Florida Site
The Astatula, Florida site is a 100 acre parcel of property located in Lake County, Astatula, Florida at 24200 CR 561. The Company initially entered into a purchase option on it that was contingent on receiving zoning approval for use as a storm debris and collection site. After a series of successful hearings without opposition, the City Council granted final zoning approval in January 2019. Most efforts of this nature are extremely time consuming because of significant opposition from the community. In this case however, there was a complete lack of opposition and the Company received quick approval from the City Council. Management of the Company saw this approval both as: i) an endorsement of its vision for the environmental solutions the Company offered to the
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community and ii) evidence of City Council’s enthusiastic acceptance of the Company’s plan of operations. After receiving approval from the City Council, the Company exercised its purchase option in December 2020, and now owns the property. With its prime location and 5,000 square foot building containing warehouse and office space, the 100 acre site is ideal for the Company’s purposes.
The Company has been using the site as its corporate headquarters since February 2021, after preparing the site to serve as its flagship tree debris collection site, mulch manufacturing facility, soil composting and production bagging site. In addition, the Company is using the property (which can accommodate millions of cubic yards of organic storm debris) for collection and storage of storm debris during hurricanes and other storms and for tree waste generated from the Company’s tree services operations. The site provides an opportunity for the Company to increase its revenues and earnings from disposal fees the Company collects from new Lake County customers and other tree service companies who pay for disposal. It also is another source of feedstock for the Company’s mulch operations.
Two Landfills of a National Waste Disposal Company
Prior to the addition to its 100 acre Astatula site, as management began expanding the Company’s business model, the Company entered into a collaborative agreement with a large, national waste disposal company that allows the Company to use two of its sites located at 242 West Keene Road, Apopka FL and 5400 Rex Drive, Winter Garden, Florida for collection and storage of tree debris collected in connection with its disaster recovery services as well as collection sites for its tree maintenance, hauling and disposal. In addition, the Company has been given the right to install and operate its mulch manufacturing and bagging equipment at these sites under very favorable lease terms. Logistically, the Company benefits from these locations which are optimally positioned for use in connection with its tree services operations. Further, the agreement allows the Company to execute on its mulch manufacturing, bagging and sales plans under a significantly expedited timeline with pre-approved zoning and at significantly lower costs. Both parties have expressed satisfaction with these arrangements. Management believes that this is in part due to the fact that, although both receive entirely different benefits, the benefits to each are quite important. For example, the Company is given the right to use tree debris that is generated from other parties as feedstock in its mulch manufacturing operations. The waste disposal company also benefits significantly. Although it is a common misconception that because wood is biodegradable it is also compostable. But in reality, wood and particularly large logs take many years to decompose. As such, by repurposing and removing the materials from these sites, the Company is solving a significant problem for its partner. Yard waste, and in particular, the large volume of tree waste brought to landfills around the country each year is a real problem with which those managing them must contend and the Company’s use of this material presents an ideal solution. In many ways, this is an ideal solution because not only does it decrease the burden on the landfills where they operate, it provides a sustainable alternative to other feedstock sourcing methods.
Beaver, Washington Sawmill
We expect to begin producing pine bark and marketable lumber at the Beaver mill in 2024. Jasper, FL Sawmill
We expect to begin producing pine bark and marketable lumber at the Jasper mill in Q4 2022.
Mulch Manufacturing, Inc. Facilities
The below Apopka, FL and Reynoldsburg, OH facilities are leased under customary industry terms and conditions. The rest of the facilities are owned. Of these owned facilities, all but Astatula are mortgaged.
Callahan, Florida
? 6 Bagging lines
? 100 Acres of storage
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? Cypress, Pine, Colored & A-Grade, Softscape Homerville, Georgia
? Cypress Sawmill & mulch production
? 3 Bagging lines
? 40 Acres of storage
? Cypress A & B grade, Chips, Softscape
Jacksonville, Florida (Colorant Plant)
? Production of mulch colorants
? Sale of mulch coloring machinery
? R & D division for new products
Jacksonville, Florida (Bagging Facility)
? Production & Bagging
? Mulch production, bagging & prepack
? Wood recycling collection site
? Retail sales
Apopka, Florida
? Full line of bagged and bulk mulch products
? Wood recycling collection site
? Retail sales
Astatula, Florida (same as Company’s Corporate Headquarters)
? Full line of bagged and bulk mulch products
? 100 Acres of storage
? Wood recycling collection site
? Retail sales
? Central Florida Arborcare Reynoldsburg, Ohio
? Sales and administrative offices
Equipment:
The Company uses a variety of heavy equipment from Boom (Cranes), Pickup and Bucket Trucks to Grinders, Front-end and Skid Steer Loaders and Bagging and Coloring Machines in its operations. The majority of the equipment used by the Company (and its operating subsidiaries) is owned outright by the Company, but the Company does lease or pledge as collateral certain equipment. The leases and secured promissory notes for such equipment contain terms that are customary in the industry(ies) that the Company and its subsidiaries operate in for such equipment.
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7) Company Insiders (Officers, Directors, and Control Persons)
The goal of this section is to provide an investor with a clear understanding of the identity of all the persons or entities that are involved in managing, controlling or advising the operations, business development and disclosure of the issuer, as well as the identity of any significant or beneficial shareholders.
Using the tabular format below, please provide information, as of the period end date of this report, regarding any person or entity owning 5% of more of any class of the issuer’s securities, as well as any officer, and any director of the company, or any person that performs a similar function, regardless of the number of shares they own. If any insiders listed are corporate shareholders or entities, provide the name and address of the person(s) beneficially owning or controlling such corporate shareholders, or the name and contact information (City, State) of an individual representing the corporation or entity in the note section.
Name of Officer/Director or Control Person
Anthony J. Raynor Ralph Spencer
John Spencer
Brian Meier
Michael J. Mete
Total Officers, Directors and 5% Shareholders as a Group
Affiliation with Company (e.g. Officer/Director/O wner of more than 5%)
Chief Executive Officer (CEO), President and Director
Owner of > 5%
Owner of > 5%
Chief Operating Officer (COO)
Chief Financial Officer (CFO)
Residential Address (City / State Only)
Winter Garden, Florida
Jacksonville, Florida
Columbus, Ohio
Homerville, Georgia
Oakland, Florida
Number of Shares Owned
38,749,500
22,101,556
6,000,000
500
0
66,851,556
Share type/class
Common Common
Common
Common
NA
Common
Ownership
Percentage of
Class Note
Outstanding*
Issued in Connection 45.2% with Share/Equity
25.8%
7.0%
Exchange
Issued in Connection with Share/Equity Exchange
Issued in Connection with a Debt Conversion
0.0% Gift Recipient
0.0%
78.0%
*Presented as a percentage of 85,693,299 shares of the Company’s Common Stock outstanding as of July 2, 2022. Anthony “Tony” J. Raynor – Currently serves as the President, Chief Executive Officer and as a Director. Michael J. Mete, CPA – Currently serves as the Company’s Chief Financial Officer.
Brian Meier – Currently serves as the Company’s Chief Operating Officer.
Laura Anthony, Esq. – Currently serves as the Company’s Securities Counsel. 14
OTC Markets Group Inc.
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8)
A.
Legal/Disciplinary History
Please identify whether any of the persons or entities listed above have, in the past 10 years, been the subject of:
1. A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);
No
2. The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities;
No
3. A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or
No
4. The entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended, or otherwise limited such person’s involvement in any type of business or securities activities.
No
Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the issuer or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities.
The Sustainable Green Team, LTD is currently involved in arbitration with Emerging Markets Consulting, LLC (“EMC”), a former service provider of the Company. On October 21, 2020, EMC initiated arbitration against the Company, alleging, among other things, breach of contract related to an agreement entered into between the Company (via NSR LLC) and EMC, in which the Company engaged EMC to provide it with consulting services related to the Company’s capital structure, investor relations strategies, and fundraising plans, including the filing of an S-1 registration statement at some point in the future, in exchange for equity compensation in the Company. EMC seeks relief against the Company in the form of the equity compensation pursuant to the agreement (2,000,000 shares of the Company’s Common Stock) and damages. The Company denies EMC’s allegations, and has also initiated counterclaims against EMC for breach of the agreement by EMC, in which it is seeking damages resulting from EMC’s breach of its duties under the agreement.
In addition, the Company named in its counterclaim to EMC’s claim another similar service provider, Rainmaker Group Consulting, LLC (“Rainmaker”), as a pre-emptive defense against any actions brought by Rainmaker against the Company. Rainmaker engaged by the Company in 2019 to provide similar consulting services as EMC was engaged to provide in exchange for the same compensation (2,000,000 shares of the Company’s Common Stock). The Company alleges that Rainmaker breached its agreement with the Company by not providing the services provided in the agreement between the Company and Rainmaker, and therefore Rainmaker is not entitled to any equity compensation by the Company. The Company has taken this action as a defensive measure against potential (in the Company’s opinion) frivolous lawsuits brought by Rainmaker against the Company. The Company is confident it will prevail in the ongoing arbitration described above being overseen by the American Arbitration Association.
B.
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9)
On March 25, 2021, the Company filed a civil complaint in the Ninth Judicial Circuit Court in Orange County, Florida against Ralph Spencer, the former owner and CEO of Mulch Manufacturing, Inc., alleging certain tortious interference with the Company’s business operations and dealings. On April 1, 2021, the Company was granted an Emergency Temporary Injunction by the Ninth Judicial Circuit Court in Orange County, Florida enjoining Mr. Spencer from, among other things, further attempts to interfere with the Company’s business operations. On August 16, 2021, the Company settled this dispute and has released Ralph Spencer from the Emergency Temporary Injunction.
On April 18, 2022, the Company filed a second civil complaint in the Ninth Judicial Circuit Court in Orange County, Florida against Ralph Spencer, the former owner and CEO of Mulch Manufacturing, Inc., alleging certain tortious interference with the Company’s business operations and dealings. On June 23, 2022, the Company was granted an Emergency Temporary Injunction by the Ninth Judicial Circuit Court in Orange County, Florida enjoining Mr. Spencer from, among other things, further attempts to interfere with the Company’s business operations. The Company is currently attempting mediation regarding this matter and the obligations owed Mr. Spencer (see Note 8 Notes Payable and above in Note 11 relating to promissory note and stock redemptions). Should this mediation fail, the Company is confident it will receive a favorable judgment in the civil complaint filed against Mr. Spencer related to these matters.
Third Party Providers
Please provide the name, address, telephone number and email address of each of the following outside providers: Securities Counsel
Name: Firm: Address 1: Address 2: Phone: Email:
Accountant or Auditor
Name: Firm: Address 1: Address 2: Phone: Email:
Investor Relations
Name: Firm: Address 1: Address 2: Phone: Email:
Other Service Providers
Laura Anthony, Esq.
Anthony L.G., PLLC
625 N. Flagler Drive, Ste., 600 West Palm Beach, FL 33401 (561) 514-0936 LAnthony@anthonypllc.com
Benjamin Borgers, CPA BF Borgers CPA, PC 5400 West Cedar Avenue Lakewood, CO 80226 (303) 953-1454 Ben@bfbcpa.us
Sherri Franklin
Investors Brand Network
8033 Sunset Blvd. Ste. 1037
Los Angeles, CA 90046
(310) 299-1717 Franklin@investorbrandnetwork.com
Provide the name of any other service provider(s) that that assisted, advised, prepared or provided information with respect to this disclosure statement. This includes counsel, broker-dealer(s), advisor(s) or consultant(s) or provided assistance or services to the issuer during the reporting period.
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10)
None.
Issuer Certification
The issuer shall include certifications by the chief executive officer and chief financial officer of the issuer (or any other persons with different titles but having the same responsibilities). The certifications shall follow the format below:
Principal Executive Officer:
I, Anthony J. Raynor certify that:
1.
I have reviewed this quarterly report of The Sustainable Green Team, Ltd.;
2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.
August 22, 2022
/s/ Anthony J. Raynor
Anthony J. Raynor, CEO
Principal Financial Officer:
I, Michael J Mete certify that:
1. I have reviewed this quarterly report of The Sustainable Green Team, Ltd.;
2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and
3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.
August 22, 2022
/s/ Michael J Mete
Michael J Mete, CFO
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I pulled this info off the SEC website.
PROGRESSIVE CARE INC.
400 Ansin Blvd, Suite A
Hallandale Beach, FL 33009
April 7, 2022
Amy Geddes
U.S. Securities & Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re:
Progressive Care Inc.
Registration Statement on Form 10-12G
Filed February 9, 2022
File No. 000-52684
Dear Ms. Geddes:
By letter dated March 9, 2022, the staff (the “Staff,” “you” or “your”) of the U.S. Securities & Exchange Commission (the “Commission”) provided Progressive Care Inc. (the “Company,” “we,” “us” or “our”) with its comments to the Company’s Registration Statement on Form 10-12G filed on February 9, 2022. We are in receipt of your letter and set forth below are the Company’s responses to the Staff’s comments. For your convenience, the comments are listed below, followed by the Company’s responses.
Information Statement
General
1. Please be advised that your registration statement will automatically become effective 60 calendar days after filing. Upon effectiveness, you will become subject to the reporting requirements of the Securities Exchange Act of 1934, even if we have not cleared comments. In the event it appears that you will not be able to respond to all of our comments by the 60th day, you may wish to consider withdrawing your registration statement and refiling it. Please confirm your understanding.
Response: The Company confirms its understanding that the Registration Statement will become automatically effective 60 days after filing and thereafter the Company will become subject to the reporting requirements of the Securities Exchange Act of 1934. In addition, we intend to file an amended Registration Statement responding to the comments below.
Cover Page
2. We note your disclosure on the cover page that “[t]here currently is no trading market for [your] common stock.” Please reconcile with your disclosure on page 31 that your “Common Stock is qualified for quotation on the OTC Markets - OTCQB under the symbol “RXMD” and has been quoted on the OTCQB since March 16, 2010.”
Response: We have revised our disclosure to reconcile these statements by revising our cover page to reflect “There currently is a limited trading market for our common stock. Our Common Stock is qualified for quotation on the OTC Markets-OTCQB under the symbol “RXMD” and has been quoted on the OTCQB since March 16, 2010. Previously, our Common Stock was quoted on the OTC Markets-OTC Pink Current, under the symbol “RXMD.”“
Our Company, page 9
3. Please revise this section to provide context for the disclosure in this section so that the description of your business and operations is clear. For example, please revise to clarify and quantify that your pharmacy operations generate the substantial majority of your revenues. Please provide quantification for the periods covered by the included financial statements. Please also explain your pharmacy operations in more detail before discussing specifics of your pharmacy operations. For example, your discussion of pharmacy ratings by PBMs is unclear as it appears before you describe your pharmacy operations more generally.
Response: We have revised our disclosure to explain our pharmacy operations in more detail before discussing specifics of pharmacy operations, to clarity and quantify that our pharmacy operations generate the substantial majority of our revenues.
4. Please revise to clarify that your data management services are relatively new and quantify the revenue contribution of these services. Please provide quantification for the periods covered by the included financial statements.
Response: We have revised our disclosure accordingly.
5. We note that you have a history of losses based upon your interim and audited financial statements. Please revise one of the opening paragraphs to disclose and quantify your history of losses and substantial near term liabilities and debt.
Response: We have revised our disclosure accordingly.
Executive Compensation, page 68
6. Please revise this section to provide the required information for the most recently completed fiscal year. Refer to Item 402(n) of Regulation S-K.
Response: We have revised this section accordingly.
The company acknowledges that
? The company is responsible for the adequacy and accuracy of the disclosure in the filing;
? Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
? The company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Thank you for your assistance in reviewing this filing.
Very Truly Yours,
/s/ Alan Jay Weisberg
Alan Jay Weisberg
Chief Executive Officer
Progressive Care Inc.
400 Ansin Blvd, Suite A
Hallandale Beach, FL 33009
United States securities and exchange commission logo
Alan Jay Weisberg
Chief Executive Officer Progressive Care Inc.
400 Ansin Blvd, Suite A Hallandale Beach, FL 33009
Re: Progressive Care Inc.
Registration Statement on Form 10-12G Filed February 9, 2022
File No. 000-52684
Dear Mr. Weisberg:
March 9, 2022
We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response and any amendment you may file in response to these comments, we may have additional comments.
Information Statement General
1. Please be advised that your registration statement will automatically become effective 60 calendar days after filing. Upon effectiveness, you will become subject to the reporting requirements of the Securities Exchange Act of 1934, even if we have not cleared comments. In the event it appears that you will not be able to respond to all of our comments by the 60th day, you may wish to consider withdrawing your registration statement and refiling it. Please confirm your understanding.
Cover Page
2. We note your disclosure on the cover page that "[t]here currently is no trading market for [your] common stock." Please reconcile with your disclosure on page 31 that your "Common Stock is qualified for quotation on the OTC Markets - OTCQB under the
Alan Jay Weisberg Progressive Care Inc. March 9, 2022
Page 2
symbol “RXMD” and has been quoted on the OTCQB since March 16, 2010." Our Company, page 9
3. Please revise this section to provide context for the disclosure in this section so that the description of your business and operations is clear. For example, please revise to clarify and quantify that your pharmacy operations generate the substantial majority of your revenues. Please provide quantification for the periods covered by the included financial statements. Please also explain your pharmacy operations in more detail before discussing specifics of your pharmacy operations. For example, your discussion of pharmacy ratings by PBMs is unclear as it appears before you describe your pharmacy operations more generally.
4. Please revise to clarify that your data management services are relatively new and quantify the revenue contribution of these services. Please provide quantification for the periods covered by the included financial statements.
5. We note that you have a history of losses based upon your interim and audited financial statements. Please revise one of the opening paragraphs to disclose and quantify your history of losses and substantial near term liabilities and debt.
Executive Compensation, page 68
6. Please revise this section to provide the required information for the most recently completed fiscal year. Refer to Item 402(n) of Regulation S-K.
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
You may contact Amy Geddes at 202-551-3304 or Angela Lumley at 202-551-3398 if you have questions regarding comments on the financial statements and related matters. Please contact Donald Field at 202-551-3680 or Erin Jaskot at 202-551-3442 with any other questions.
FirstName LastNameAlan Jay Weisberg
Comapany NameProgressive Care Inc.
March 9, 2022 Page 2 FirstName LastName
Sincerely,
Division of Corporation Finance Office of Trade & Services
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 2022
Progressive Care Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-52684 32-0186005
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
400 Ansin Blvd., Suite A
Hallandale Beach, FL 33009
(Address of Principal Executive Offices) (Zip Code)
(305) 760-2053
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
? Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
? Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
? Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
? Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: None
Item 2.02 Results of Operations and Financial Condition.
Attached hereto as Exhibit 99.1 is a press release (the “Earnings Press Release”) issued by Progressive Care Inc. (the “Company”) on August 12, 2022, announcing its financial results for the three months ended June 30, 2022. The Earnings Press Release is incorporated by reference into this Item 2.02, and the foregoing description of the Earnings Press Release is qualified in its entirety by reference to this exhibit.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
99.1 Earnings Press Release dated August 12, 2022
104 Cover Page Interactive Data File (formatted as Inline XBRL)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Progressive Care Inc.
By /s/ Jay Weisberg
Name:
Jay Weisberg
Title: Chief Executive Officer
Date: August 12, 2022
ex99-1.htm
Exhibit 99.1
Progressive Care Reports Second Quarter 2022 Results Highlighted by 4% Growth to $10.0 Million in Revenue
Core Prescription Revenue Growth of 13%
Miami, FL – August 12, 2022 – Globe Newswire via NewMediaWire – Progressive Care, Inc. (OTCQB: RXMD) (the “Company”), a personalized healthcare services and technology provider, today announced financial and operational results for the three and six months ended June 30, 2022.
Key Financial Highlights for the Three Months Ended June 30, 2022 compared to Three Months Ended June 30, 2021
? Revenue increased 4% to approximately $10.0 million
? Prescription revenue increased 13% to almost $9.3 million
? Operating loss remained flat at $0.2 million
? Cash balance of $2.2 million
Business Highlights for the Three Months Ended June 30, 2022
? Gained SEC reporting status
? Expansion into rapidly growing chronic care management and remote patient monitoring markets
Summary Financials for the Three Months Ended June 30, 2022, as Compared with the Three Months Ended June 30, 2021
For the Three Months Ended June 30,
2022 2021
Prescription revenue $ 9,275,774 $ 8,172,840
340B contract revenue 706,102 725,323
Testing revenue 368,197 1,057,232
Other revenue 1,450 1,300
10,351,523 9,956,695
PBM Fees (377,939 ) (356,748 )
Sales returns - (2,813 )
Revenues, net $ 9,973,584 $ 9,597,134
Management Commentary
Alan Jay Weisberg, Chairman and Chief Executive Officer of Progressive Care, commented, “We continued to see improvement in several segments of our business. Our 340B covered entity business has continued to improve due to revenues related to dispensing prescriptions and third-party administration fees, which have returned to the same levels prior to January 2022. In our value-based pharmacy business, our revenues have improved to over $9 million this quarter, an improvement of over $1 million year over year from the same period last year. Our patient numbers have increased steadily quarter to quarter in 2022.”
Mr. Weisberg continued, “Going forward, our marketing and business development focus will be on more profitable business lines, such as our long-term care business, 340B contract pharmacy services, and 340B third party administration services. We will also develop new and expanded services in the areas of chronic care management and remote patient monitoring. We have done a great job identifying such opportunities in the past years with our testing business as an example, which helped us during the pandemic to improve our cash flow and liquidity, and we’re extremely excited to enter the remote patient monitoring market. We are in the process of finalizing the development of our RPM platform and expect to be ready for the launch of our RPM solutions during the third quarter of 2022.”
Financial Results for Three Months Ended June 30, 2022
For the three months ended June 30, 2022 and 2021, the Company recognized overall revenue from operations of approximately $10.0 million and $9.6 million, respectively. Prescription revenue for the three months ended June 30, 2022 was approximately $9.3 million when compared to $8.2 million the same period in 2021, a 13% period over period increase.
The Company’s pharmacy business filled approximately 118,000 and 107,000 prescriptions during the three months ended June 30, 2022, and 2021, respectively, a 10% period over period increase in the number of prescriptions filled.
Revenue from COVID-19 testing was approximately $0.4 million and $1.1 million for the three months ended June 30, 2022, and 2021, respectively. The decrease was primarily due to lower COVID-19 testing sales. As the COVID-19 pandemic faded worldwide, the need for testing has decreased as it relates to travel and business continuity. The Company’s CFO, Cecile Munnik said, “It is difficult to predict whether these conditions will be recurring given recent COVID-19 pandemic conditions but we are well positioned to react if another COVID-19 outbreak occurs as we have built a reputation of being a reliable partner for COVID-19 testing solutions. We have built reputable relationships with well-known media productions companies and these relationships provide us with recurring COVID-19 testing revenue.”
340B contract revenue for the three months ended June 30, 2022 was flat as compared to the same period in 2021.
Gross profit margins decreased from 27% for the three months ended June 30, 2021, to 20% when compared to the same period in 2022. The 7% period over period decrease is due to the decrease in COVID-19 testing revenues, which have significantly higher margins than pharmacy operations.
The loss from operations increased by approximately $12,000 for the three months ended June 30, 2022, when compared to the same period in 2021, due to the decrease in COVID-19 testing revenues, which was offset by an increase in prescription revenue and a decrease in overall operating expenses.
During the earnings call, Birute Norkute, the Company’s COO said “We are pleased to report that our second quarter activities have built upon and continued the momentum from our first quarter performance from all our business segments. Our focus on growth and operational excellence has allowed us to retain a status of performance as a Five-Star pharmacy, which will maximize our reimbursements and will allow us to earn performance bonuses with certain payors. This positive trend is already showing in our data. We also see a significant uptick in new patient acquisition numbers, more than in previous quarters, including patients testing positive for COVID-19 looking for the latest and most effective therapies to treat the virus.”
Financial Results for Six Months Ended June 30, 2022
For the six months ended June 30, 2022 and 2021, the Company recognized overall revenue from operations of approximately $20.0 million and $19.2 million, respectively, a 4% year over year increase. Prescription revenue for the six months ended June 30, 2022 was approximately $17.9 million when compared to $16.8 million the same period in 2021, a 6% period over period increase.
The Company’s pharmacy business has filled approximately 229,000 and 223,000 prescriptions during the six months ended June 30, 2022, and 2021, respectively, a 3% period over period increase in the number of prescriptions filled. The Company’s management believes this trend will continue through the remainder of the year as the medication adherence measures begin to impact providers performance and their future potential monetary incentives, which are tied to their patient’s adherence measures.
Revenue from COVID-19 testing was approximately $1.7 million and $1.6 million for the six months ended June 30, 2022, and 2021, respectively. The Company recognized record COVID-19 testing revenue in January 2022 as the country was dealing with the Delta and Omicron outbreak during that period. Since January 2022 the demand for COVID-19 testing has slowed down as the need for testing has decreased as it relates to travel and business continuity.
Gross profit margins decreased from 26% for the six months ended June 30, 2021, to 22% when compared to the same period in 2022. The 4% period over period decrease is due to the decrease in COVID-19 testing revenues. which have significantly higher margins than pharmacy operations.
The loss from operations decreased by approximately $0.5 million for the six months ended June 30, 2022, when compared to the same period in 2021, due to the increase in pharmacy revenue, decrease in overall operating expenses, which was offset by a decrease in 340B contract revenue.
Mr. Weisberg, concluded, “Our outlook for the remainder of 2022 and beyond is positive. We continue our progress towards diversification and expansion of our business lines in long-term care, chronic care management and remote patient monitoring and development of our data platforms in our ClearMetrX subsidiary, and to achieve other strategic goals such as widening our geographic markets that we serve. We are endlessly grateful to our shareholders for their continued confidence and support as we continue on our path for a record breaking 2022.”
Progressive Care, Inc.
Progressive Care, Inc. (OTCQB: RXMD), through its subsidiaries, is a Florida health services organization and provider of prescription pharmaceuticals, compounded medications, provider of tele-pharmacy services, the sale of anti-retroviral medications, medication therapy management (MTM), the supply of prescription medications to long-term care facilities, and health practice risk management.
For more information about Progressive Care, please visit the company’s website.
Connect and stay in touch with us on social media:
Progressive Care Inc.
https://www.progressivecareus.com/
https://twitter.com/ProgressCareUS
PharmCoRx
https://www.pharmcorx.com/
https://twitter.com/PharmCoRx
ClearMetrX
https://www.clearmetrx.com/
https://www.facebook.com/clearmetrx/
Forward-Looking Statements:
Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company’s expectations about its future operating results, performance, and opportunities that involve substantial risks and uncertainties. When used herein, the words “anticipate,” “believe,” “estimate,” “upcoming,” “plan,” “target,” “intend” and “expect” and similar expressions, as they relate to Progressive Care Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
Public Relations Contact:
Carlos Rangel
carlosr@pharmcorx.com
Investor Relations Contact:
ClearThink Capital
nyc@clearthink.capital
p917-658-7878
External Resources:
progressivecareus.com
twitter.com/ProgressCareUS
pharmcorx.com
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Forward Forward
Progressive Care Reports Second Quarter 2022 Results Highlighted by 4% Growth to $10.0 Million in Revenue
See on website
Core Prescription Revenue Growth of 13%
Miami, FL – August 12, 2022 – Globe Newswire via NewMediaWire – Progressive Care, Inc. (OTCQB: RXMD) (the “Company”), a personalized healthcare services and technology provider, today announced financial and operational results for the three and six months ended June 30, 2022.
Key Financial Highlights for the Three Months Ended June 30, 2022 compared to Three Months Ended June 30, 2021
• Revenue increased 4% to approximately $10.0 million
• Prescription revenue increased 13% to almost $9.3 million
• Operating loss remained flat at $0.2 million
• Cash balance of $2.2 million
Business Highlights for the Three Months Ended June 30, 2022
• Gained SEC reporting status
• Expansion into rapidly growing chronic care management and remote patient monitoring markets
Summary Financials for the Three Months Ended June 30, 2022, as Compared with the Three Months Ended June 30, 2021
?
Summary Financials for the Three Months Ended June 30, 2022, as Compared with the Three Months Ended June 30, 2021
Management Commentary
Alan Jay Weisberg, Chairman and Chief Executive Officer of Progressive Care, commented, “We continued to see improvement in several segments of our business. Our 340B covered entity business has continued to improve due to revenues related to dispensing prescriptions and third-party administration fees, which have returned to the same levels prior to January 2022. In our value-based pharmacy business, our revenues have improved to over $9 million this quarter, an improvement of over $1 million year over year from the same period last year. Our patient numbers have increased steadily quarter to quarter in 2022.”
Mr. Weisberg continued, “Going forward, our marketing and business development focus will be on more profitable business lines, such as our long-term care business, 340B contract pharmacy services, and 340B third party administration services. We will also develop new and expanded services in the areas of chronic care management and remote patient monitoring. We have done a great job identifying such opportunities in the past years with our testing business as an example, which helped us during the pandemic to improve our cash flow and liquidity, and we’re extremely excited to enter the remote patient monitoring market. We are in the process of finalizing the development of our RPM platform and expect to be ready for the launch of our RPM solutions during the third quarter of 2022.”
Financial Results for Three Months Ended June 30, 2022
For the three months ended June 30, 2022 and 2021, the Company recognized overall revenue from operations of approximately $10.0 million and $9.6 million, respectively. Prescription revenue for the three months ended June 30, 2022 was approximately $9.3 million when compared to $8.2 million the same period in 2021, a 13% period over period increase.
The Company’s pharmacy business filled approximately 118,000 and 107,000 prescriptions during the three months ended June 30, 2022, and 2021, respectively, a 10% period over period increase in the number of prescriptions filled.
Revenue from COVID-19 testing was approximately $0.4 million and $1.1 million for the three months ended June 30, 2022, and 2021, respectively. The decrease was primarily due to lower COVID-19 testing sales. As the COVID-19 pandemic faded worldwide, the need for testing has decreased as it relates to travel and business continuity. The Company’s CFO, Cecile Munnik said, “It is difficult to predict whether these conditions will be recurring given recent COVID-19 pandemic conditions but we are well positioned to react if another COVID-19 outbreak occurs as we have built a reputation of being a reliable partner for COVID-19 testing solutions. We have built reputable relationships with well-known media productions companies and these relationships provide us with recurring COVID-19 testing revenue.”
340B contract revenue for the three months ended June 30, 2022 was flat as compared to the same period in 2021.
Gross profit margins decreased from 27% for the three months ended June 30, 2021, to 20% when compared to the same period in 2022. The 7% period over period decrease is due to the decrease in COVID-19 testing revenues, which have significantly higher margins than pharmacy operations.
The loss from operations increased by approximately $12,000 for the three months ended June 30, 2022, when compared to the same period in 2021, due to the decrease in COVID-19 testing revenues, which was offset by an increase in prescription revenue and a decrease in overall operating expenses.
During the earnings call, Birute Norkute, the Company’s COO said “We are pleased to report that our second quarter activities have built upon and continued the momentum from our first quarter performance from all our business segments. Our focus on growth and operational excellence has allowed us to retain a status of performance as a Five-Star pharmacy, which will maximize our reimbursements and will allow us to earn performance bonuses with certain payors. This positive trend is already showing in our data. We also see a significant uptick in new patient acquisition numbers, more than in previous quarters, including patients testing positive for COVID-19 looking for the latest and most effective therapies to treat the virus.”
Financial Results for Six Months Ended June 30, 2022
For the six months ended June 30, 2022 and 2021, the Company recognized overall revenue from operations of approximately $20.0 million and $19.2 million, respectively, a 4% year over year increase. Prescription revenue for the six months ended June 30, 2022 was approximately $17.9 million when compared to $16.8 million the same period in 2021, a 6% period over period increase.
The Company’s pharmacy business has filled approximately 229,000 and 223,000 prescriptions during the six months ended June 30, 2022, and 2021, respectively, a 3% period over period increase in the number of prescriptions filled. The Company’s management believes this trend will continue through the remainder of the year as the medication adherence measures begin to impact providers performance and their future potential monetary incentives, which are tied to their patient’s adherence measures.
Revenue from COVID-19 testing was approximately $1.7 million and $1.6 million for the six months ended June 30, 2022, and 2021, respectively. The Company recognized record COVID-19 testing revenue in January 2022 as the country was dealing with the Delta and Omicron outbreak during that period. Since January 2022 the demand for COVID-19 testing has slowed down as the need for testing has decreased as it relates to travel and business continuity.
Gross profit margins decreased from 26% for the six months ended June 30, 2021, to 22% when compared to the same period in 2022. The 4% period over period decrease is due to the decrease in COVID-19 testing revenues. which have significantly higher margins than pharmacy operations.
The loss from operations decreased by approximately $0.5 million for the six months ended June 30, 2022, when compared to the same period in 2021, due to the increase in pharmacy revenue, decrease in overall operating expenses, which was offset by a decrease in 340B contract revenue.
Mr. Weisberg, concluded, “Our outlook for the remainder of 2022 and beyond is positive. We continue our progress towards diversification and expansion of our business lines in long-term care, chronic care management and remote patient monitoring and development of our data platforms in our ClearMetrX subsidiary, and to achieve other strategic goals such as widening our geographic markets that we serve. We are endlessly grateful to our shareholders for their continued confidence and support as we continue on our path for a record breaking 2022.”
Progressive Care, Inc.
Progressive Care, Inc. (OTCQB: RXMD), through its subsidiaries, is a Florida health services organization and provider of prescription pharmaceuticals, compounded medications, provider of tele-pharmacy services, the sale of anti-retroviral medications, medication therapy management (MTM), the supply of prescription medications to long-term care facilities, and health practice risk management.
For more information about Progressive Care, please visit the company’s website.
Connect and stay in touch with us on social media:
Progressive Care Inc.
https://www.progressivecareus.com/
PharmCoRx
https://www.pharmcorx.com/
ClearMetrX
https://www.clearmetrx.com/
Forward-Looking Statements:
Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company’s expectations about its future operating results, performance, and opportunities that involve substantial risks and uncertainties. When used herein, the words “anticipate,” “believe,” “estimate,” “upcoming,” “plan,” “target,” “intend” and “expect” and similar expressions, as they relate to Progressive Care Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
Public Relations Contact:
Carlos Rangel
carlosr@pharmcorx.com
Investor Relations Contact:
ClearThink Capital
nyc@clearthink.capital
p917-658-7878
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I guess you didn’t listen to the CC. RXMD did inquire about other financing and those loans were either more expensive or too toxic, so Iliad is the best deal as of now.