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Come on, Chechen and Chong have been my idols since college. Lol
Your questions should be in the posted transcripts. Overall, this CC was much better than past ones.
Jay is CEO and Chairman of the Board, so he basically controls the company, and Jay will leave when Jay wants to. He does virtually no promoting of RXMD, sadly.
I guess Stockforce and I were the only ones to present questions for Bob.
Conference call today!
4:30 EST
857-232-0157
Code 422095
News out!!
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Progressive Care Announces Launch of New Logo as it Continues to Upgrade and Strengthen Its PharmcoRx Brand
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MIAMI, FL, August 08, 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 the redesign and launch of a new logo for PharmcoRx their data-driven pharmacy brand.
PharmcoRx Pharmacy provides a wide variety of crucial services including an innovative combination of adherence tools, clinical services, patient navigation and engagement, real-time collaboration with patient’s caretakers, medication reconciliation post-discharge, monthly medication review, 24/7 access to clinical pharmacy support through the company’s online platform, automated Rx refill management, specialty adherence packaging that includes the company’s successful Smart-Pack adherence packaging and free same-day delivery.
The redesign of the PharmcoRx logo is a fresh, modern, and progressive look that reflects the intuitive approach the company is taking toward the delivery of 5 Star medication adherence performance pharmacy services - helping patients take their prescription medication correctly, on time, in the correct dosage, and for the length of time their physician prescribed.
“Since its inception, our company has been putting a lot of emphasis on superior quality and excellent patient care,” says Jay Weisberg, CEO of Progressive Care Inc. “Recently we determined to initiate rebranding and reinforce our logo because a better, stronger, and more compelling symbol underscores the impact we make in our community. We are taking great pride in our progress and the difference we make in people’s lives.”
While still featuring the company’s signature blue and red colors; representing their core values, all letters of the same font, without capitals were chosen to reflect transparency and equality for all. For PharmcoRx, every patient is an opportunity to provide the highest level of quality care and service, regardless of background, gender, age, or any other social, socioeconomic, or religious characteristics.
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
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901 North Miami Beach Blvd
Suite 1 and 2
North Miami Beach, FL 33162
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Progressive Care Announces Shareholder Conference Call and Business Update on August 11, 2022
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MIAMI, August 5, 2022 - Progressive Care Inc. (OTCQB: RXMD), a personalized healthcare services and technology company (the “Company” or “Progressive Care”), is pleased to announce that the Company has scheduled an investor conference call at 4:30 PM ET on Thursday, August 11, 2022.
Chairman and CEO, Alan Jay Weisberg, stated, “We are looking forward to updating you on the results of the second quarter, our prescription growth, and recent developments that we believe will continue to accelerate our growth as a diversified technology-centric healthcare organization”.
Those attending the investor conference call will have the opportunity to submit questions concerning the Company to Stuart Smith of SmallCapVoice.Com, Inc. via e-mail: ssmith@smallcapvoice.com by 12:00 PM EST on Wednesday, August 10th, 2022. The Company plans to address as many appropriate questions as possible.
To access the call:
Dial-In Number: 1-857-232-0157
Access Code: 422095
For those unable to participate in the live conference call, a replay will be available at https://www.smallcapvoice.com/clients/rxmd/. shortly after the call has concluded.
An archived version of the webcast will also be available https://progressivecareus.com/news-releases/.
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
Find Out More
Facebook
Twitter
Link
Website
Copyright © 2022 Progressive Care, All rights reserved.
You are receiving this email because you opted in via our website.
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Progressive Care
901 North Miami Beach Blvd
Suite 1 and 2
North Miami Beach, FL 33162
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We should be getting an announcement for a conference call this week. We need to get our questions and concerns tabulated for Stewart ready.
That usually signals a news release.
Anyone have a volume count. Schwab shows zero. Has trading been halted?
7/15 is the agreed upon day when Iliad can start liquidating more shares. So with that being said, hopefully any news would include paying off the note.
What’s with all the $10-$25 trades? MM games?
Maybe that long awaited “ Letter to the Shareholders “ with answers. Go RXMD
We have not had a Letter to the Shareholders since March 2021.
This is an excerpt from the last Letter to Shareholders dated 3/3/2021. What happened to this year’s Letter to Shareholders? Also, how many goals did management Achieve? I see only two goals achieved out of 8.
Management has the following 2021 Strategic Goals:
Strive to achieve over $50 million in sales.
Expansion of COVID-19 testing and vaccination programs.
Completion of telehealth integration with the roll out of the Eagle Force Digital Passport program.
Nationwide launch of ClearMetrX 340B TPA services.
Secure additional not-for-profit healthcare contracts and long-term care facility relationships.
Achieve full enterprise profitability and earnings growth.
Become SEC-registered and fully reporting.
Complete an uplist to a national exchange.
OTCQB Certification
I, Alan Jay Weisberg, Chief Executive Officer of Progressive Care, Inc. (“the Company”), certify that:
1. The Company is registered or required to file periodic reporting with the SEC or is exempt from SEC registration as indicated below (mark the box below that applies with an “X”):
[?] Company is registered under Section 12(g) of the Exchange Act
[?] Company is relying on Exchange Act Rule 12g3-2(b)
[?] Company is a bank that reports to a Bank Regulator under Section 12(i) of the Exchange Act
[?] Company is a bank that is non-SEC reporting but is current in its reporting to a Banking Regulator [?] Company is reporting under Section 15(d) of the Exchange Act.
[?] Company is reporting under the Alternative Reporting Company Disclosure Guidelines
[?] Company is reporting under Regulation A (Tier 2)
[?] Other (describe)
2. The Company is current in its reporting obligations as of the most recent fiscal year end and any subsequent quarters, and such information has been posted either on the SEC’s EDGAR system or the OTC Disclosure & News Service, as applicable.
3. The company is duly organized, validly existing and in good standing under the laws of the State of Delaware in which the Company is organized or does business.
4. The share information below is for the primary OTCQB traded security as of the latest practicable date: Trading Symbol RXMD
The data in this chart is as of:
Shares Authorized
Total Shares Outstanding
Number of Restricted Shares1
Unrestricted Shares Held by Officers, Directors, 10% Control Persons & Affiliates Public Float: Subtract Lines C and D from Line B
% Public Float: Line E Divided by Line B (as a %)2 Number of Beneficial Shareholders of at least 100 shares3
March 24, 2022 (A) 1,000,000,000
(B) 548,962,587 (C) 85,215,530 (D) 2,500,000
(E) 461,247,057 (F) 84%
(G) 5,938
1 Restricted Shares means securities that are subject to resale restrictions for any reason. Your transfer agent should be able to provide the total number of restricted securities.
2 Public Float means 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 “10 percent Control Person”), or any Affiliates thereof, or any Family Members of officers,
directors, and control persons. Family Member shall mean a Person's spouse, parents, children, and siblings, whether by blood, marriage or adoption, or anyone residing in such Person's home. OTCQB traded securities are required to have a freely traded public float of at least 10% of the shares outstanding unless an exemption applies.
3 Beneficial Shareholder means any person who, directly or indirectly has or shares voting power of such security or investment power, which includes the power to dispose, or to direct the disposition of, such security. OTCQB traded securities are required to have at least 50 beneficial shareholders unless an exemption applies.
OTC Markets Group Inc. OTCQB Certification (v. 3.1 March 22, 2022)
5. Convertible Debt:
The following is a complete list of all promissory notes, convertible notes, convertible debentures, or any other debt instruments that may be converted into a class of the issuer’s equity securities that were issued or outstanding at any time during the last complete fiscal year and any interim period between the last fiscal year end and the date of this OTCQB Certification:
[?] Check this box if there were no promissory notes, convertible notes, or other convertible debt arrangements issued or outstanding at any point during this time period.
Date of Note Issuance
Principal Amount at Issuance ($)
Outstanding Balance ($)4
Maturity Date
Conversion Terms (e.g., pricing mechanism for determining conversion of instrument to shares)
# Shares Converted to Date
# of Potential Shares to be Issued Upon Conversion 5
Name of Noteholder (entities must have individual with voting / investment control disclosed). 6
Reason for Issuance (e.g., Loan, Services, etc.)
3/8/2019
$3,310,000
$2,143,891
5/15/2022
See below
60,486,969
53,597,282
Iliad Research and Trading, L.P. – control person – John F. Fife
Loan
Total Outstanding Total Shares: Balance:
Use the space below to provide any additional details, including footnotes to the table above:
Conversion terms – Iliad Research and Trading, L.P. - average of the two lowest closing trading prices during the
twenty trading days immediately preceding the applicable conversion.
6. The following is a complete list of any law firm(s) and attorney(s) that acted as the Company’s primary legal counsel in preparing its most recent annual report. Include the firm and attorney(s) name if outside counsel, or name and title if internal counsel. (If no attorney assisted in putting together the disclosure, identify the person(s) who prepared the disclosure and their relationship to the company.) Please also identify any other attorney, if different than the primary legal counsel, that assisted the company during the prior fiscal year on any matter including but not limited to, preparation of disclosure, press releases, consulting services, corporate action or merger assistance, etc.
4 The Outstanding Balance is to include accrued interest.
5 The total number of shares that can be issued upon full conversion of the Outstanding Balance. The number should not factor any “blockers” or limitations on the percentage of outstanding shares that can be owned by the Noteholder at a particular time. For purposes of this calculation, please use the current market pricing (e.g. most recent closing price, bid, etc.) of the security if conversion is based on a variable market rate.
6 International Reporting Companies may elect not to disclose the names of noteholders who are non-affiliates of the company. “Affiliate” is a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, an officer, a director, or a shareholder beneficially owning 10 percent or more of the Company’s outstanding shares.
OTC Markets Group Inc. OTCQB Certification (v. 3.1 March 22, 2022)
Joseph M. Lucosky
Lucosky Brookman, LLP
101 Wood Avenue South, 5th Floor Woodbridge, New Jersey 08830 Phone: (732) 395-4400
7. The following is a complete list of third-party providers, including firm names and addresses, and primary contact names, engaged by the Company, its officers, directors or controlling shareholders, at any time during the last complete fiscal year and any interim period between the last fiscal year end and the date of this OTCQB Certification, to provide investor relations services, public relations services, marketing, brand awareness, consulting, stock promotion, or any other related services to the Company. Please describe the services provided by each third-party provider listed below. If none, please state “None”.
Clearthink Capital
c/o Tysadco Partners
210 West 77th, #7W
New York, NY 10024
Investor relations and stock promotion services
SmallCapVoice.com, Inc. 202 Walton Way #192 Cedar Park, TX 78613 Investor relations services
CMW Media
555 West Beech Street, Suite 502
San Diego, CA 92101
Public relations and marketing services
InvestorsHub.com, Inc.
3122 Mahan Drive, Suite 801-137 Tallahassee, FL 32308-2502
Investor relations and stock promotion services
NewMediaWire
16501 Ventura Blvd., Suite 424
Encino, CA 91436
Public relations and press release services
Mediant Communications P.O. Box 29976
New York, NY 10087-9976 Investor relations services
EDM Media LLC
1750 N. Collins Blvd, Suite 101-V Richardson, TX 75080
Investor relations services
OTC Markets Group Inc.
OTCQB Certification (v. 3.1 March 22, 2022)
8. Officers, Directors and 5% Control Persons:
The following is a complete list of Officers, Directors and 5% Control Persons (control persons are beneficial owners of five percent (5%) or more of any class of the issuer’s equity securities), including name, address, and number of shares owned. Preferred shares, options, warrants that can be converted into common shares within the next 60 days should be included in the shareholdings listed below. If any of the beneficial shareholders are corporate entities, provide the name and address of the person(s) owning or controlling such corporate entities.
Name (First, Last)
Armen Karapetyan Alan Jay Weisberg Birute Norkute Jervis Hough Cecile Munnik Oleg Firer
Joseph Ziegler
City and State
(and Country if outside US)
Aventura, FL
Boca Raton, FL
North Miami Beach, FL Duluth, GA
Oakland Park, FL North Miami Beach, FL Hillsboro Beach, FL
Number of Shares Owned (list common, preferred, warrants and options separately)
37,169,210 8,570,487 3,112,500 1,943,396 1,000,000 1,943,396 1,785,715
Percentage of Class of Shares Owned
6.77% 1.56% 0.57% 0.35% 0.18% 0.35% 0.33%
Use the space below to provide any additional details, including conversion terms of any class of the issuer’s equity securities:
None
9. Certification:
Date: April 19, 2022
Name of Certifying CEO or CFO: Alan Jay Weisberg
Title: Chief Executive Officer
Signature: /s/ Alan Jay Weisberg
(Digital Signatures should appear as “/s/ [OFFICER NAME]”)
OTC Markets Group Inc.
OTCQB Certification (v. 3.1 March 22, 2022)
Consolidation of shares between Market Makers. Scott got his money for the year, so he won’t be back.
Alan Weisberg is well connected CEO and Chairman of the Board.
Alan Weisberg Overview.
Alan Jay Weisberg has been associated with eleven companies, according to public records. The companies were formed over a fourteen year period with the most recent being incorporated one year ago in June of 2020. Six of the companies are still active while the remaining five are now listed as inactive.
Background Report for Alan Jay Weisberg
Network Visualizer
Progressive Care, Inc.
Alan Jay Weisberg
Pharmco, L.L.C.
Wedgewood Business Park 400 Ansin Condominium Association, Inc.
Smart Medical Alliance, Inc.
Pharmco Corp.
Birute Norkute
Cecile Munnik
Touchpoint Rx, LLC
Pharmco 780, Inc.
Hme Experts, Inc.
Family Physicians Rx, Inc.
Clearmetrx Inc.
Shital P. Mars
Fw Touchpoint Rx Investors, LLC
Scott Hansel
W Touchpoint Rx Investors, LLC
Sh Touchpoint Investors, LLC
David A. Wright
Robert Bedwell
Vadim German
Armen Karapetyan
Stephanie Delatour
Michael Ducker
Monica Hidalgo
Jed D. Ladin
Natalie Ladin
Zusha Tenenbaum
David Krohn
Barry C. Krohn
Shital Parikh
Andy Subachan
Progressive Care Merchant Services, Inc.
Excel
Companies for Alan Weisberg
Name Status
Progressive Care, Inc. Active
Pharmco, L.L.C. Active
Touchpoint Rx, LLC Active
Family Physicians Rx, Inc. Active
Clearmetrx Inc. Active
Wedgewood Business Park 400 Ansin Condominium Association, Inc. Active
Pharmco 780, Inc. Inactive
Progressive Care Merchant Services, Inc.
You have valid arguments, those questions should have been submitted in the conference call.
I agree, some investors don’t have patience. To them it’s all about instant gratification.
Good luck RXMD investors.
Here’s the transcript.
Progressive Care's (RXMD) CEO Alan J. Weisberg on Q1 2022 Results - Earnings Call Transcript
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Progressive Care Inc. (OTCQB:RXMD)
Q1 2022 Earnings Conference Call
May 17, 2022 4:30 PM ET
Company Participants
Alan J. Weisberg – Chairman and Chief Executive Officer
Birute Norkute – Chief Operating Officer
Cecile Munnik – Chief Financial Officer
Bob Bedwell – Director-Administrative Services
Conference Call Participants
Presentation
Operator
All right, everybody. Thanks so much for holding on the line, and welcome to the Progressive Care First Quarter Financial Results conference call with the management team of Progressive Care ticker symbol RXMD. Today is May 17, 2022.
Before we get the call started, I’m going to read the forward-looking statements for you now. You can find these forward-looking statements at the bottom of every press release and regulatory filings submitted to the Securities and Exchange Commission. The statements contained on this call 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 Exchange 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.
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When used herein, the words anticipate, believe, estimate, upcoming, plan, target, intend and expect and similar expressions as they relate to Progressive Care, and its subsidiaries or its management team 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 results to differ materially from those expressed in or implied by these forward-looking statements.
All right. The fun is over for me, and I’m excited to hand the call off the Chairman and CEO of Progressive Care, Inc., and that is Alan J. Weisberg. Alan, the call is now yours.
Alan J. Weisberg
Hi. Good afternoon, and welcome to the earnings conference call for the quarter ended March 31, 2022. I am Alan J. Weisberg, Chief Executive Officer and Chairman of the Board of Progressive Care, Inc. Today, we would like to discuss the results of the first quarter as well as our plans and initiatives for the year 2022. Helping me today are our Chief Financial Officer, Cecile; Birute, our Chief Operating Officer; and our Director of Administrative Services, Bob.
The first quarter of 2022 was an exciting period for the company as we have begun a number of planned initiatives in line with our vision to become a diversified healthcare company. We have began to realize the benefits of the operating efficiencies implemented and achieved reductions in operating expenses, which resulted in significant improvement in our operating results. We also continued our progress towards uplifting to a national exchange market.
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I’d like to start off by discussing with you some of our efforts to diversify our business in the sectors of healthcare that we will believe will make the company more profitable. Our objective is to expand the outreach of our core business to more patients, thereby increasing a prescription revenue and improving profitability by reducing certain operating deficiencies.
A key differentiator of our business have been a prescription delivery service to our patients. The service adds benefit to our providers by delivering vital medications to the patient’s front door, which improves medication adherence by the patients. As we are all aware of the efforts of inflation, the cost of auto, fuel and maintenance has risen significantly and has negatively effect of delivery cost.
To counter the impacts of inflation, the company has undertaken in aggressive focus on cutting operating expenses relating to delivery costs by synchronizing dispensing of the patient’s medication and dispensing 90-day supply of medications so that we minimize the number of delivery trips. The synchronization of medication necessitates coordination of the refills of patients’ prescriptions to be dispensed at the same time, therefore, delaying some of the refills to be dispensed at the later date.
While it is having a short-term impact on the overall number of prescriptions dispensed, it makes it simpler for the patients to manage multiple medications and provides the company with the opportunity to cut costs associated with gas deliveries as well as providing a more productive workflow for the pharmacy team.
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Our long-term care pharmacy project undertaken during the second half of 2021 has come to successful completion. Our closed store license pharmacy has gained long-term care pharmacy contracts with all the necessary major third-party payers. The company’s long-term care pharmacy service includes a combination of adherence tools, clinical pharmacy services, patients navigation and engagement, real-time collaboration with patients, caregivers, medication reconciliation post-discharge, monthly medication review, 24/7 access to our clinical pharmacy support through the company’s online platform, automated prescription refill management, specialty adherence packaging that enclose a successful Smart-Pack adherence packaging and free same-day delivery.
We believe that long-term care pharmacy business will provide the opportunity – the company with the opportunities to significantly increase our sales and will produce a predictable recurring revenue stream with much better profit margins compared to the margins related to pharmacy retail contracts with the same payers. This is also a business model that historically speaking, carries a much stronger valuation and therefore, should contribute to greater shareholder value. We are very happy to finally be in a position to take advantage of the LTC market and anticipating the benefits in the second half of the year.
We have also recently announced our intention to enter into the rapidly growing Remote Patient Monitoring or RPM market. The global RPM market is projected to reach in excess of $175 billion by 2027, growing at a robust 27% compounded annual growth rate over the next five years. Over 67% of Medicare beneficiaries have two or more chronic conditions, accounting for 94% of Medicare spending. Chronic conditions have a significant impact on healthcare spending as well as hospital readmissions.
Remote patient monitoring has been develop to mitigate Medicare spending by providing clinicians with digital data to implement more informed treatment plans for patients enrolled in this service. We believe that our company’s experience in medication and therapy management and its active participation in data analytics would carry over directly into the RPN marketplace.
The implementation of patient-oriented technology such as wearable 5G-powered home devices to track physiological data will enhance Progressive Care’s capability to provide doctors usable insight into patients overall health. Additionally, it will benefit our existing physician base as well as provide a more complete suite of services for future accounts. CMS approved several CPT code that pay RPM various services and generates on average $120 to $160 per patient per month. We have identified this as another source of recurring revenue for the company as we plan to enter into collaborative agreements with providers and healthcare organizations and build them monthly for RPM device setup and monitoring services provided by our team.
Our team believes the RPM space is set to be one of the most important growth areas within the healthcare industry and the near future. And it is our most logical next step given our broad base of patients who have multiple chronic conditions. Progressive Care has differentiated itself from competitors in terms of commitment to medication therapy management and our reputation among healthcare professionals in the domain is one of our strongest advantages. We expect to be ready for the launch of our RPM solution in the next quarter.
Now, I would like to provide you with the latest update related to the company’s efforts to uplist to NASDAQ. We continue our progress this quarter to a planned capital raise and an uplisting to NASDAQ. We stay focused and determined to complete our goals in the near future. First, I would like to congratulate all of our shareholders with Progressive Care becoming an SEC reporting company. Our Form 10-Q registration statement with the SEC became effective in April, and list was our first quarterly report filed with the SEC on Form 10-Q. From here on, we are obligated to publish reports to our shareholders pursuant to SEC reporting requirements, providing everyone with greater transparency for building stronger investor confidence.
When I stepped up to the CEO position of Progressive Care, I made the goal of becoming an SEC company my priority as I am a strong believer if we want our company to attract capital, we will have to meet the regulatory and transparency standards are expected by institutional and accredited investors. But as we accomplish this mission, we have a few more that we want to achieve immediately.
Therefore, we expect to file an amendment to our Form S-1 with audited financial statements for the year ended December 31, 2021, as well as our first quarter 2022 unaudited financial statements with the SEC. Following this, we anticipate to complete our intended public offering with the assistance of investment advisers and underwriters simultaneously with the uplist on the NASDAQ capital market. Becoming a NASDAQ-listed company opens up the opportunity to raise additional capital to finance the company’s growth through acquisition.
Over the last several years, we have established strong relationships with companies in the healthcare space that we believe are very synergetic with what we do now or would like to get involved with and could complement our growth in the future. We wish we could discuss more about the uplift, but legal restrictions are limiting what we can disclose at this time.
We have executed a standstill agreement with our noteholder, Iliad Research and Trading. As part of the negotiated terms of the note, Iliad has agreed not to redeem any portion of the note or sell any shares through July 15. This was very important to all of us who should help us alleviate the selling pressure on our stock.
And now I would like to turn the call to our COO, Birute.
Birute Norkute
Thank you, Jay. Our first quarter results reflect solid performance from all our business segments. As we continue making progress towards our goals, we are extremely focused on growth and operational excellence while providing wide range [ph] service to our patients and subscribers we serve. As we all know, COVD-19 impacted our lives for the past two years, and we are happy it is becoming an endemic.
At the beginning of the year, we were able to monetize the Omicron outbreak and we’re extremely busy in test department. It has slowed down since, and right now, we are pleased that our long-term relationships, which we were cultivating with the production companies are still keeping us busy with projects that bring us revenue.
Also, as COVID is becoming endemic, we are seeing businesses coming back to normal, pre-COVID patterns. We see that physicians are looking at their patients, maintenance medication compliance with much greater scrutiny and interest. We are seeing patients returning to the office for their checkups on a regular basis versus emergency basis. All of this together gives us a boost in confidence that prescribing patterns are returning to normal, and we will be able to continue focusing on our growth without roadblocks, and we’ll have a much better response from our target clinics and prescribers.
We are employing a combination of standard and unusual strategies to drive the new patient prescription acquisition. This trend is already showing in our data. We see a significant uptick in new patient acquisition numbers more than in previous quarters.
In the last six months, we pent up our efforts to complete the ClearMetrX platform. It will be servicing healthcare organizations and 340B Covered Entities providing valuable data, which will give deep insight into the state of business so they can manage their operations more efficiently. Currently, more and more providers choose to operate on a value-based Medicare model. Value-based programs reward healthcare providers with incentive payments for the quality of care they give to the people with Medicare. However, it pressures the practice to be very agile to meet their [indiscernible] requirement.
Pharmacy performance compiles as much as 50% of the practices core. However, the payers report their data back to providers with one month to three months delay, which can jeopardize their performance and negatively affect performance bonuses.
ClearMetrX is able to provide near real-time actionable data insights, the information, which is displayed in an easy-to-understand format for even the entry-level practice employees and take action to prevent measure failing in the future. Providers will be able to see what is happening in every measurable aspect related to pharmacy, which is evaluated for HEDIS measures, like diabetes, cholesterol, hypertension medication adherence measurement, status therapy compliance and the like.
Practice administrators will be able to see prescribing trends for each of their prescribers and even outsourced specialists. It will bring – help them to see at a glance what these problematic areas are in brand, high-cost, high-risk medication prescribing them. What kind of issues are identified, what, in turn will lead to cost savings and better rating for a practice. And at the same time, our companies will benefit in increased prescription volume as well as from the fees we expect to charge for software usage.
For 340B Entities, we will give an unsurpassed ability to review every single aspect of their business in an easy-to-use portal, which displays all the details of their covered Entities performance including, but not limited to, financial performance, manipulated, qualified claims future collections among others.
All of these features will be delivered in a convenient revenue-generating platform, which comes with a dedicated concierge representative to counsel, drive and lead the individuals using the platform. We will further position our TPA services as all inclusive continued types that provides a full suite of services to the covered entity.
Another initiative we have been working on and what is finally starting to take shape is our focus on providing different medication dispensed options and specifically remote dispensing. We believe this technology will complement our business greatly. The efficiencies derived from it will include reduction of delivery costs while acting as a convenient option, enticing customers to try our pharmacy services and become long-term patients.
As we mentioned, our long-term care pharmacy received all the necessary contracts to operate, and now we’re diligently working to set all operational pieces in order, so we can start marketing and onboarding of long-term care facilities and service their patients. We are expected to finalize our workflow and infrastructure-related part during second and third quarter.
Back to you, Jay.
Alan J. Weisberg
Thank you, Birute. Let’s continue with a summary of our quarterly financial report, which provides you with our financial position as of March 31, 2022. Our results of operations, changes in stockholders equity and cash flows, that the three months ended March 31, 2022. The financial statements and the report will be reviewed by our Independent Public Accounting Firm, Daszkal Bolton. Please be sure to review our financial report, which is available both on SEC and OTC website as well as our website.
Cecile, our CFO, will walk us through the financial results.
Cecile Munnik
Thank you, Jay. Good afternoon, everyone, and thank you for joining our call. As Jay described in his comments, the first quarter was an exciting one for us as reflected in our financial results. For the quarters ended March 31, 2022 and 2021, we recorded overall revenue from operations of approximately $10.1 million and $9.6 million, respectively, a $446,000 period-over-period increase.
While most of the increase in revenue was attributable to the COVID-19 testing of approximately $1.3 million for the first quarter of 2022, which was a $737,000 increase over the same period in 2021. We have recorded record COVID-19 testing revenue in January 2022 as a country is dealing with the Delta and Omicron outbreak during that period.
Since January 2022, the cases of COVID-19 infections and the demand for COVID-19 testing have slowed down. It is difficult to predict where these conditions will continue or recurring, given recent COVID-19 pandemic conditions in Florida. We are well positioned to reactive or another COVID-19 outbreak occurs as we have built a reputation of being a highly reliable partner for COVID-19 testing solutions. We have also those repeatable relationships with well-known production companies, and these relationships provide us with recurring COVID-19 testing revenue.
Our dispensing fee and third-party administration revenue earned on our 340B contracts for the first quarter of 2022 was $388,000 compared to $724,000 for the same period in 2021. The decrease is due to a significant decrease in the reimbursement rate for uninsured patients enrolled in the Gilead PREP program, effective beginning the first quarter of 2022. That had an overall unfavorable impact on our 340B contract revenue in the amount of approximately $200,000.
We believe, though, the decrease in the 340B contract revenue will recover during the second quarter of 2022, as our existing covered entities continue enrolling patients in alternative program and insurance plans that provide greater reimbursement. We have sold approximately 111,000 and 116,000 prescriptions during the first quarters of 2022 and 2021, respectively.
The decrease in the number of prescriptions filled was due to our continued efforts to decrease operating expenses as it relates to delivery costs by synchronizing dispensing of medications to the extent that we minimize the number of trips necessarily to one patient.
The synchronization of the medication necessitates coordination with patient refill to ensure all patient, patient prescription are dispensed at the same time and therefore, cause a delay in some results to be dispensed later. The decrease in the number of prescriptions during the first quarter of 2022 has also been adversely impacted by the recent changes in the Gilead PREP program for uninsured patients and the reenrollment requirements.
Gross profit margins remained consistent at around 24% for the quarter, which is slightly down from the 25% margin from the same period in 2021. Most of this decrease in profitability resulted from the unfavorable variance in the 340B contract reimbursement from changes in the Gilead PREP program.
Our operating expenses decreased by approximately $600,000 or 18% for the first quarter of 2022 when compared to the same period in 2021. The decrease was mainly attributable to the following: decrease in salaries, wages and employee-related expenses due to period-over-period decrease in headcount, less time invested in training on pharmacies software when compared to 2021 and consulting fees of approximately $200,000. Decrease in rent expense due to nonrecurring leasehold improvements related expenses of approximately $200,000. A decrease in amortization expense due to intangible assets being fully amortized and other operating expenses of approximately $200,000.
Our loss from operations improved to just over $135,000 for the quarter as compared to over $643,000 for the same period in 2021. This improvement was mostly attributable to decreases in operating expenses of almost $600,000 in 2022 as compared to the same quarter in 2021. Our cost reduction efforts were largely successful near as employee-related costs, eliminating redundancies and consultant costs, reducing rent expense through negotiating less cost release renewals as well as non-recurring leasehold improvements related expenses.
Our net loss was negatively impacted by non-operating items such as unfavorable changes in the fair value of the derivative liability, attributed to the embedded conversion feature in the Iliad Research convertible note. We believe that this will be a non-recurring item through the remainder of the year. Despite the net loss, we managed to achieve positive EBITDA of over $101,000 for the quarter compared to EBITDA of $66,000 for the same quarter in 2021. Our cash position was over $2.4 million at March 31, 2022, up from the $1.4 million at December 31, 2021, and we expect our cash position will remain around this level throughout 2022.
That completes my remarks on the financial results for the first quarter of 2022. Back to you, Jay.
Alan J. Weisberg
Thank you, Cecile. Our outlook for the remainder of 2022 and beyond is positive. We have continued the momentum from our fourth quarter 2021 results into 2022, and we expect the remainder of 2022 will meet or exceed our expectations.
We continue our progress towards completion of our business plan, which calls for further diversification of our services and revenue stream and the completion of the capital raise and uplift to the NASDAQ market to provide the working capital to improve our debt equity position, complete the development of our data platform and our ClearMetrX subsidiary, and to achieve other strategic goals such as widening our geographic market that we serve.
We will keep you up to date on our progress towards uplisting to NASDAQ. We expect that the completion of the uplift will have an immediate and positive impact on growth for the company, enabling us to pick up our operating pace by having access to institutional capital and to pursue the businesses we think will help us roll out our services nationwide at a faster pace.
Meanwhile, we will do our part by staying on a steady course of growing our business. We have no doubt that optimism around Progressive Care will soon begin to be reflected in the share price of our stock.
On behalf of all of us working at Progressive Care, we are endlessly grateful to our shareholders for the continued confidence and support as we continue on our path for a record-breaking 2022. Today, your loyalty and support is more valuable than ever, and we are dedicated to rewarding your continued loyalty and long-term support.
That concludes the remarks for the earnings call. We would like to turn now to questions that we received in advance of the earnings call. Our Director of Administrative Services, Bob Bedwell, will review the questions that we received prior to our meeting today and provide responses. Bob?
Bob Bedwell
Thank you, Jay. We received these questions prior to Monday’s deadline for submission of questions and we’ll respond to each question as appropriate. First question, the maturity date of the Iliad Chicago Ventures convertible debt was May 15, 2022. Will they start converting the notes after this maturity date?
We have executed another extension agreement with Iliad Research, whereby the maturity date of the note was extended to May 15, 2023. In that same agreement, we also executed a standstill agreement where the lender agreed to forgo redemption requests and stock trading until July 15, 2022.
Question number two, will the company obtain conventional bank loans to pay off the current convertible debt?
We expect that along with the NASDAQ uplist, we also will have a planned public stock offering, which we hope to execute this summer. We expect to pay off the Iliad Research convertible debt from the public offering proceeds.
Question number three. When will the S-1 filing be effective? We became a fully reported company when our Form-10 registration statement was made effective this past April. Now that we’ve completed our first SEC filing on Form 10-Q, we will file an amended Form S-1 with updated financial information for the first quarter 2022 in the coming weeks. That document will go through the SEC review and comment process before final approval.
Question number four, is there a merger plan for post uplift? If so, with whom?
There are no merger plans at the present time. The uplift is necessary to provide us with the proper type of capital to execute our plan. We will explore opportunities like mergers and acquisitions as they arise.
Question number five, how soon will you be able to dispense prescriptions in all 50 states?
We hold nonresident pharmacy licenses that allow us to dispense to patients in 14 states, including Florida. We will continue to add other nonresident licenses as other opportunities arise. Our post uplift strategy also entails broadening our licensing in other states.
The sixth and final question, the company is thinking about uplisting to NASDAQ, but the stock price is too low. Are you going to cancel the reverse spread in order to help the price go up?
Management believes the reverse stock split along with the planned IPO will increase the stock price and provide the necessary capitalization to allow the company to meet the NASDAQ entrance requirements. If and when the reverse stock split is approved by the regulators then we will keep the reverse stock split at the lowest possible ratio.
That’s all the questions we have for today. We thank you for taking the time to join us on this call and for submitting your questions to us. We hope that you have a great remainder of the year, and we look forward to talking with you again in August during our next earnings conference call.
Question-and-Answer Session
Q -
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Progressive Care Reports First Quarter 2022 Financial Results Highlighted by 5% Growth in Revenue to $10.1 Million
MIAMI, FL, May 17, 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 months ended March 31, 2022.
See on website
Key Financial Highlights for the Three Months Ended March 31, 2022 compared to the same period in 2021
Revenue increased by 5%, from $9.6 million in 2021 to $10.1 million in 2022
Gross margin decreased slightly to 24% in 2022 from 25% in 2021
Operating loss decreased by 79%, from $0.6 million in 2021 to $0.1 million in 2022
Adjusted EBITDA increased by 53% from $66,349 in 2021 to $101,646 in 2022
Business Highlights
Strengthened management team with industry experts
Expanded corporate services with enhanced COVID-19 platform capabilities
Approved as COVID-19 test vendor in the U.S. for travel to Beijing Winter Olympic Games
Engaged with Alteryx software implementation partner Aimpoint Digital to streamline healthcare data management workflows.
Partnered with Podium to boost customer satisfaction, efficiency and brand awareness
Gained long-term pharmacy contracts with major payors
Announced expansion plans into the rapidly growing multi-billion dollar Remote Patient Monitoring space
Gained SEC reporting status on April 11, 2022 through the filing of Form 10-12G Summary Financials for the Three Months Ended March 31, 2022, as Compared with the Three Months Ended March 31, 2021
Management Commentary
Alan Jay Weisberg, Chairman and Chief Executive Officer of Progressive Care, commented, ‘The first quarter of 2022 was an exciting period for the Company as we have begun a number of planned initiatives in line with our vision to become a diversified healthcare company. We have begun to realize the benefits of the operating efficiencies implemented and achieved reductions in operating expenses which resulted in significant improvement in our operating results. We also continued our progress towards uplisting to a national exchange market.”
Weisberg continued, “Financially, we had a solid start to 2022, highlighted by our 5% revenue growth. Our quarterly revenue of $10.1 million demonstrates our team’s efforts in diversifying our products and services. With a further reduction of operating expenses as a percentage of revenue to 25% during the first quarter, the Company’s operating efficiency continues to improve as we scale our business. Our recent expansion into long-term care pharmacy contracts provides Progressive Care with an opportunity to significantly increase its sales that produce much better margins. In addition, we expect that future growth will be driven by new data management and virtual healthcare service lines; expansion of 340B Covered Entities Third Party Administrative services; market penetration in existing geographies; development of enhanced healthcare B2B services; development of cash-based products and services; and continued implementation of MTM protocols.” Weisberg concluded, “We expect that growth in these revenue components will continue, as we have good momentum and we expect 2022 performance to reflect that. We look forward to updating the market and our shareholders with our progress on both our business and capital market initiatives over the next few months.”
Financial Results for Three Months Ended March 31, 2022
For the three months ended March 31, 2022 and 2021, we recognized overall revenue from operations of approximately $10.1 million and $9.6 million, respectively. Net pharmacy revenues increased by approximately $0.4 million for three months ended March 31, 2022 when compared to the same period in 2021. For the three months ended March 31, 2022, the increase in net pharmacy revenues was mainly attributable to an increase in COVID-19 testing revenue of $0.7 million which was offset by a decrease in 340B contract revenue of $0.3 million when compared to the same period in 2021. Prescription revenue for the three months ended March 31, 2022 was flat as compared to the same period in 2021.
Prescription revenues represented 86% and 90% of all revenue for the three months ended March 31, 2022 and 2021, respectively. Revenue from 340B contracts is 4% and 8% as a percentage of total net revenues for the three months ended March 31, 2022 and 2021, respectively. Dispensing fee and third-party administration revenue earned on our 340B contracts for the three months ended March 31, 2022, and 2021 were $0.4 million and $0.7 million, respectively, and decreased by $0.3 million for the three months ended March 31, 2022, when compared to the same period in 2021. The decrease is due to a significant decrease in the reimbursement rates for uninsured patients enrolled in the Gilead PREP program effective beginning the first quarter of 2022 that had an overall unfavorable impact on our 340B contract revenue in the amount of $0.2 million. We believe the decrease in 340B contract revenue will recover during the second quarter of 2022 as our existing covered entities continue enrolling patients in alternative programs and insurance plans that provide greater reimbursements.
We have filled approximately 111,000 and 116,000 prescriptions during the three months ended March 31, 2022 and 2021, respectively, a 4% period over period decrease in the number of prescriptions filled. The decrease in the number of prescriptions filled was due to our continued effort to decrease operating expenses as it relates to delivery costs by synchronizing dispensing of medications to the extent that we minimize the number of trips necessary to one patient. The synchronization of medication necessitates coordination of patient refills to ensure all patient prescriptions are dispensed at the same time and therefore cause a delay in some refills to be dispensed later. This might have a short-term impact on the overall number of prescriptions dispensed, however, it makes it simpler for the patient to manage multiple medications and provides us with the opportunity to manage costs associated with deliveries as well as providing a more productive workflow for our pharmacy team. The decrease in the number of dispensed prescriptions during the first quarter of 2022 has also been adversely impacted by the recent changes in the Gilead PREP program for uninsured patients and the re enrollment requirements.
For the three months ended March 31, 2022 and 2021, we have earned approximately $1.3 million and $0.6 million, respectively from COVID-19 testing. We have recorded 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 cases of COVID-19 infections and demand for COVID-19 testing have slowed down. It is difficult to predict whether these conditions will be recurring given recent COVID-19 pandemic conditions in Florida. We are well positioned to react if another COVID-19 outbreak occurs as we have built a reputation of being a highly reliable partner for COVID-19 testing solutions. We have built reputable relationships with well-known productions companies and these relationships provide us with recurring COVID-19 testing revenue.
Gross profit margins decreased from 25% for the three months ended March 31, 2021, to 24% when compared to the same period in 2022, largely due to the decrease in 340B contract revenue.
Our operating expenses decreased by approximately $0.6 million, or 18%, for the three months ended March 31, 2022 when compared to the same period in 2021. The decrease was mainly attributable to the following:
Decrease in salaries, wages an employee related expenses due to period over period decrease in headcount, and less time invested in training on pharmacy software when compared to 2021 in the amount of $0.1 million;
Decrease in consulting fees in the amount of $0.1 million;
Decrease in rent expense due to non-recurring leasehold improvement related expenses in the amount of $0.2 million;
Decrease in amortization expense due to intangible assets being fully amortized in the amount of $0.1 million;
Decrease in other operating expenses in the amount of $0.1 million.
Operating expenses as a percentage of revenue declined to 25% for the three months ended March 31, 2022, when compared to 32% for the three months ended March 31, 2021, reflecting the Company’s continued focus on operation optimization and efficiency.
Operating loss decreased by approximately $0.5 million, or 79%, to $0.1 million for the three months ended March 31, 2022, when compared to $0.6 million for the same period in 2021, because of decreases in overall operating expenses.
Adjusted EBITDA increased by approximately $35,297, or 53%, to $101,646 for the three months ended March 31, 2022, when compared to $66,349 EBITDA for the same period in 2021.
Net loss for the three months ended March 31, 2022 was $1.4 million, compared to a net income of $26,852 for the same period in 2021. The increase in net loss is mainly attributable to non-operating items such as gain on debt settlement and loss from the adverse change in the fair value of the derivative liability, offset by a reduction in the loss from operations period over period.
Cash balance was $2.4 million at March 31, 2022, as compared to $1.4 million at December 31, 2021.
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?phone: (917) 658-7878
?
Progressive Care Reports First Quarter 2022 Financial Results Highlighted by 5% Growth in Revenue to $10.1 Million
MIAMI, FL, May 17, 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 months ended March 31, 2022.
See on website
Key Financial Highlights for the Three Months Ended March 31, 2022 compared to the same period in 2021
Revenue increased by 5%, from $9.6 million in 2021 to $10.1 million in 2022
Gross margin decreased slightly to 24% in 2022 from 25% in 2021
Operating loss decreased by 79%, from $0.6 million in 2021 to $0.1 million in 2022
Adjusted EBITDA increased by 53% from $66,349 in 2021 to $101,646 in 2022
Business Highlights
Strengthened management team with industry experts
Expanded corporate services with enhanced COVID-19 platform capabilities
Approved as COVID-19 test vendor in the U.S. for travel to Beijing Winter Olympic Games
Engaged with Alteryx software implementation partner Aimpoint Digital to streamline healthcare data management workflows.
Partnered with Podium to boost customer satisfaction, efficiency and brand awareness
Gained long-term pharmacy contracts with major payors
Announced expansion plans into the rapidly growing multi-billion dollar Remote Patient Monitoring space
Gained SEC reporting status on April 11, 2022 through the filing of Form 10-12G Summary Financials for the Three Months Ended March 31, 2022, as Compared with the Three Months Ended March 31, 2021
Management Commentary
Alan Jay Weisberg, Chairman and Chief Executive Officer of Progressive Care, commented, ‘The first quarter of 2022 was an exciting period for the Company as we have begun a number of planned initiatives in line with our vision to become a diversified healthcare company. We have begun to realize the benefits of the operating efficiencies implemented and achieved reductions in operating expenses which resulted in significant improvement in our operating results. We also continued our progress towards uplisting to a national exchange market.”
Weisberg continued, “Financially, we had a solid start to 2022, highlighted by our 5% revenue growth. Our quarterly revenue of $10.1 million demonstrates our team’s efforts in diversifying our products and services. With a further reduction of operating expenses as a percentage of revenue to 25% during the first quarter, the Company’s operating efficiency continues to improve as we scale our business. Our recent expansion into long-term care pharmacy contracts provides Progressive Care with an opportunity to significantly increase its sales that produce much better margins. In addition, we expect that future growth will be driven by new data management and virtual healthcare service lines; expansion of 340B Covered Entities Third Party Administrative services; market penetration in existing geographies; development of enhanced healthcare B2B services; development of cash-based products and services; and continued implementation of MTM protocols.” Weisberg concluded, “We expect that growth in these revenue components will continue, as we have good momentum and we expect 2022 performance to reflect that. We look forward to updating the market and our shareholders with our progress on both our business and capital market initiatives over the next few months.”
Financial Results for Three Months Ended March 31, 2022
For the three months ended March 31, 2022 and 2021, we recognized overall revenue from operations of approximately $10.1 million and $9.6 million, respectively. Net pharmacy revenues increased by approximately $0.4 million for three months ended March 31, 2022 when compared to the same period in 2021. For the three months ended March 31, 2022, the increase in net pharmacy revenues was mainly attributable to an increase in COVID-19 testing revenue of $0.7 million which was offset by a decrease in 340B contract revenue of $0.3 million when compared to the same period in 2021. Prescription revenue for the three months ended March 31, 2022 was flat as compared to the same period in 2021.
Prescription revenues represented 86% and 90% of all revenue for the three months ended March 31, 2022 and 2021, respectively. Revenue from 340B contracts is 4% and 8% as a percentage of total net revenues for the three months ended March 31, 2022 and 2021, respectively. Dispensing fee and third-party administration revenue earned on our 340B contracts for the three months ended March 31, 2022, and 2021 were $0.4 million and $0.7 million, respectively, and decreased by $0.3 million for the three months ended March 31, 2022, when compared to the same period in 2021. The decrease is due to a significant decrease in the reimbursement rates for uninsured patients enrolled in the Gilead PREP program effective beginning the first quarter of 2022 that had an overall unfavorable impact on our 340B contract revenue in the amount of $0.2 million. We believe the decrease in 340B contract revenue will recover during the second quarter of 2022 as our existing covered entities continue enrolling patients in alternative programs and insurance plans that provide greater reimbursements.
We have filled approximately 111,000 and 116,000 prescriptions during the three months ended March 31, 2022 and 2021, respectively, a 4% period over period decrease in the number of prescriptions filled. The decrease in the number of prescriptions filled was due to our continued effort to decrease operating expenses as it relates to delivery costs by synchronizing dispensing of medications to the extent that we minimize the number of trips necessary to one patient. The synchronization of medication necessitates coordination of patient refills to ensure all patient prescriptions are dispensed at the same time and therefore cause a delay in some refills to be dispensed later. This might have a short-term impact on the overall number of prescriptions dispensed, however, it makes it simpler for the patient to manage multiple medications and provides us with the opportunity to manage costs associated with deliveries as well as providing a more productive workflow for our pharmacy team. The decrease in the number of dispensed prescriptions during the first quarter of 2022 has also been adversely impacted by the recent changes in the Gilead PREP program for uninsured patients and the re enrollment requirements.
For the three months ended March 31, 2022 and 2021, we have earned approximately $1.3 million and $0.6 million, respectively from COVID-19 testing. We have recorded 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 cases of COVID-19 infections and demand for COVID-19 testing have slowed down. It is difficult to predict whether these conditions will be recurring given recent COVID-19 pandemic conditions in Florida. We are well positioned to react if another COVID-19 outbreak occurs as we have built a reputation of being a highly reliable partner for COVID-19 testing solutions. We have built reputable relationships with well-known productions companies and these relationships provide us with recurring COVID-19 testing revenue.
Gross profit margins decreased from 25% for the three months ended March 31, 2021, to 24% when compared to the same period in 2022, largely due to the decrease in 340B contract revenue.
Our operating expenses decreased by approximately $0.6 million, or 18%, for the three months ended March 31, 2022 when compared to the same period in 2021. The decrease was mainly attributable to the following:
Decrease in salaries, wages an employee related expenses due to period over period decrease in headcount, and less time invested in training on pharmacy software when compared to 2021 in the amount of $0.1 million;
Decrease in consulting fees in the amount of $0.1 million;
Decrease in rent expense due to non-recurring leasehold improvement related expenses in the amount of $0.2 million;
Decrease in amortization expense due to intangible assets being fully amortized in the amount of $0.1 million;
Decrease in other operating expenses in the amount of $0.1 million.
Operating expenses as a percentage of revenue declined to 25% for the three months ended March 31, 2022, when compared to 32% for the three months ended March 31, 2021, reflecting the Company’s continued focus on operation optimization and efficiency.
Operating loss decreased by approximately $0.5 million, or 79%, to $0.1 million for the three months ended March 31, 2022, when compared to $0.6 million for the same period in 2021, because of decreases in overall operating expenses.
Adjusted EBITDA increased by approximately $35,297, or 53%, to $101,646 for the three months ended March 31, 2022, when compared to $66,349 EBITDA for the same period in 2021.
Net loss for the three months ended March 31, 2022 was $1.4 million, compared to a net income of $26,852 for the same period in 2021. The increase in net loss is mainly attributable to non-operating items such as gain on debt settlement and loss from the adverse change in the fair value of the derivative liability, offset by a reduction in the loss from operations period over period.
Cash balance was $2.4 million at March 31, 2022, as compared to $1.4 million at December 31, 2021.
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?phone: (917) 658-7878
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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: April 2, 2022 (the “Reporting Period”)
As of April 2, 2022, the number of shares outstanding of our Common Stock was 88,026,816.
As of the prior quarter ending January 1, 2022, the number of shares outstanding of our Common Stock was 90,460,425.
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: 24-200 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: April 2, 2022 88,026,816 as of date: April 2, 2022 601,836 as of date: April 2, 2022 171 as of date: April 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.
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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:
Common:
Opening Date: December 31, 2019
Balance 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
Stock
Common Stock
Common Stock
Common Stock
Commo n Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Spencer
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
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
In connection with Sierra Exchange
Exchange
Subscriptio n
In connection with Sierra Exchange
Subscriptio n
Debt conversion
Debt conversion
Prior Year Loan Incentive
Compensation
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
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$0.33 Yes
$0.80 Yes
$0.24 Yes
$0.35 Yes
$0.40 Yes
$0.40 Yes
$0.58 Yes
$1.06 No
$1.15 No
Restricted
Restricted Restricted
Restricted
Restricted Restricted
Restricted Restricted Restricted
New 6,000,000 Common $0.62 Yes John Debtconversion Restricted
Stock
Spencer
OTC Markets Group Inc.
10/4/21 New 125,000
10/15/21 Cancellation (8,797,800) 10/22/21 New 300,000 10/22/21 New 1,000,000
10/22/21 New 133,333
11/15/21 Cancellation (1,300,092) 11/29/21 New 800,000 11/29/21 New 66,667 11/29/21 New 2,000,000 11/29/21 New 100,000 11/29/21 New 66,667 11/29/21 New 106,670 11/29/21 New 66,667
12/2/21 New 1,000,000 12/15/21 Cancellation (1,300,092) 12/30/21 New 200,000 12/31/21 New 400,000
1/13/22 New 266,667 1/19/22 Cancellation (1,300,092)
1/21/22 New 200,000 2/17/22 Cancellation (1,300,092) 3/15/22 Cancellation (1,300,092)
3/23/2022 New 1,000,000 Shares Outstanding on
Date of This Report: 86,726,724
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
$0.75
$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
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
First Apex International Inc7
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
Compensation
Exchange
Subscription
Subscription
Subscription
Exchange
Subscription
Subscription
Subscription
Subscription
Subscription
Subscription
Subscription
Subscription
Exchange
Exchange
Equipment Purchase
Subscription
Exchange
Subscription
Exchanges
Exchange
Subscription
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
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OTC Markets Group Inc.
Ending Balance:
Date: April 2, 2022 Common: 88,026,816
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
$220,523
342,550
5% APR
11/1/2023
Not convertible
Ogden’s Incorporated Stephen Ogden
Purchase of Business
8/16/21 $10,650,000 $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.
4) Financial Statements
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OTC Markets Group Inc.
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)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 April 2, 2022 posted separately on OTC Markets on May 16, 2022.
D. Statement of Income -– Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the periods ending April 2, 2022 posted separately on OTC Markets on May 16, 2022.
E. Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the periods ending April 2, 2022 posted separately on OTC Markets on May 16, 2022.
F. Statement of Changes in Shareholders’ Equity – Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the period ending April 2, 2022 posted separately on OTC Markets on May 16, 2022.
G. Financial Notes – Incorporated by Reference to the Consolidated Financial Statements and Notes thereto for the period ending April 2, 2022 posted separately on OTC Markets on May 16, 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 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
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.
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OTC Markets Group Inc.
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.
Effect of DGCL §251(g) in Doing Business with the Company and on Trading of Common Stock.
8 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
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:
The Company operates primarily through its wholly owned operating subsidiaries. The principal products of each of the Company’s operating subsidiaries is described below.
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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.
Sierra Gold Merger Corp.
There are no operations under The Sustainable Green Team, Ltd.’s subsidiary Sierra Gold Merger Corp.
10 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
6)
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 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,
11 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
OTC Markets Group Inc.
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 time line 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 Saw Mill
We expect to begin producing pine bark and marketable lumber at the Beaver mill in 2024.
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
? Cypress, Pine, Colored & A-Grade, Softscape
Homerville, Georgia
? Cypress Sawmill & mulch production
? 3 Bagging lines
? 40 Acres of storage
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7)
? 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.
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.
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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
24,701,740
6,000,000
500
0
68,451,740
Share type/class
Common Common
Common
Common
NA
Common
Ownership
Percentage of
Class Note
Outstanding*
Issued in Connection 44.0% with Share/Equity
28.1%
6.8%
Exchange
Issued in Connection with Share/Equity Exchange
Issued in Connection with a Debt Conversion
0.0% Gift Recipient
0.0%
78.9%
8)
A.
*Presented as a percentage of 88,026,816 shares of the Company’s Common Stock outstanding as of April 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.
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);
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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
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.
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
15 OTC Pink Basic Disclosure Guidelines (v3.1 June 24, 2021)
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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.
9) 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.
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:
10)
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OTC Markets Group Inc.
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.
May 16, 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.
May 16, 2022
/s/ Michael J Mete
Michael J Mete, CFO
1.
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News out!!
THE SUSTAINABLE GREEN TEAM, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL QUARTER ENDED APRIL 2, 2022
THE SUSTAINABLE GREEN TEAM LTD. AND SUBSIDIARIES FOR THE FISCAL QUARTER ENDED APRIL 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 - 21
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
2,671,776 249,086 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
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
April 2, 2022
January 1, 2022
ASSETS
Short-term investments
Accounts receivable, net of allowance for doubtful accounts Receivables from Factor
$ 106,736 52 261,081 2,429,147 Inventories 7,081,140
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
$ $
1,750,859 11,629,015
55,501,114
1,024,417 324,000 81,800 912,474 2,342,691
69,472,820
2,369,979 234,029 7,311,207 9,915,215
699,944 17,878,496 18,578,440 28,493,655
-
8,803 35,151,652 5,818,710 40,979,165
$
$
Total Liabilities and Stockholders' Equity
$
The accompanying footnotes are an integral part of these condensed consolidated financial
$
statements. `
69,472,820
66,905,152
3
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
April 2, 2022
10,329,448 9,207,057 1,122,391
1,275,406 5,640 1,281,046
(158,655)
(425,044) 598,300 16,923 66,605 256,784
98,129 21,968 76,161
0.00 0.00
88,334,047 93,974,051
April 3, 2021
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 Gain on sale of fixed assets Other, net
Total other expense
Income (loss) before provision for income taxes
Provision for income taxes Net Income (loss)
Net loss per common share - basic Net loss per common share - diluted
Weighted average shares outstanding - basic Weighted average shares outstanding - diluted
$
$
9,291,931 7,891,211 1,400,720
1,164,954 6,860 1,171,814
228,906
(249,788) - - (3,582) (253,370)
(24,464) 96,971 (121,435)
(0.00) (0.00)
89,440,108 89,440,108
$
$ $
$
$ $
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
4
Three Months Ended April 2, 2022: Balance at January 2, 2022
Stock subscriptions Stock redemptions Net income
Balance as of April 2, 2022
Three Months Ended April 3, 2021: Balance at January 1, 2021
Stock issued for 2020 debt inducement Stock issued for compensation
Net loss
Balance as of April 3, 2021
Preferred Stock
Additional Common Stock Paid-in Amount Capital
Retained Earnings
$ 6,620,006
(877,459) 76,161
$ 5,818,710
Retained Earnings
$ 3,957,946
(121,435) $ 3,836,511
THE SUSTAINABLE GREEN TEAM AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
Shares
Amount
Shares
90,460,425 1,466,667 (3,900,275)
88,026,817
Total
$ 41,265,502 1,100,000 (1,462,500) 76,161
$ 40,979,165
90
90
$
$
-
-
$
$
9,046 $ 34,636,450 147 1,099,853 (390) (584,651)
8,803 $ 35,151,652
Additional Paid-in Amount Capital
8,917 $ 6,825,996 30 62,970 3 28,797
8,950 $ 6,917,763
Preferred Stock Shares
Common Stock Amount Shares
Total
$ 10,792,859 63,000 28,800 (121,435)
$ 10,763,224
90
90
$
$
- 89,168,405 300,000 25,000
- 89,493,405
$
$
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
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 Bargain purchase gain
Gain on sale of fixed assets
Changes in operating assets and liabilities:
$
76,161
- 904,137 - (598,300) (16,923)
$
Accounts receivable, net
Receivable from Factor
Inventory 506,945
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) Purchases of long-term investments
Proceeds from long-term investments Net cash from (used in) investing activities
Cash flows from financing activities: Principal payments on leases
Proceeds from notes payable
Payment on notes payable
Payment on notes payable, related parties Distributions
Net cash provided by (used in) financing activities Net increase (decrease) in cash
Cash - beginning of period
Cash - end of period
Supplemental cash flow information: Cash paid for:
Interest
Income taxes
Non-cash investing and financing activities:
Purchase of plant, property and equipment for notes payable Stock issued for accrued borrowing inducement
Property and equipment bargain purchase recognition
$
(247,355) (301,797) 171,266
(3,673,361) 2,299,713
17,771 2,193,489
(32,284)
(386,715) (398,193)
(817,192) (502,363) 506,287 3,924
418,663 -
1,340,000 -
598,300
$
$ $
$ $ $
Three Months Ended
April 2, 2022
April 3, 2021
(121,435)
(350) 834,591 28,800 - -
(4,121,843) - (3,820) 5,151 1,500,246 (1,878,660)
(123,995) 2,299,713
17,771 2,193,489
(32,284)
(386,715) (398,193)
(817,192) (502,363) 506,287 3,924
134,874 -
- 63,000
-
2,277,545 (2,429,147)
The accompanying footnotes are an integral part of these condensed consolidated financial statements.
6
$ $
$ $ $
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 interests 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).
7
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 April 2, 2022 and January 1, 2022 and for the three months ended April 2, 2022 and April 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 ended April 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. There was 13 weeks in each of the three months ended April 2, 2022 and April 3, 2021.
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 15, 2022.
Principles of Consolidation
The unaudited condensed consolidated financial statements are presented on a comparative basis. The unaudited condensed consolidated balance sheets at April 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 period ended April 2, 2022 includes the accounts of SGTM, NRS LLC, MM, DDP LLC, Rose, and SGMC. For the period ended April 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 months ended April 2, 2022, includes the account balances of SGTM, NRS LLC, MM, DDP LLC, Rose, and SGMC. The three months ended April 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 April 2, 2022 includes the accounts of SGTM, NRS LLC, MM DDP LLC, and Rose. The three months ended April 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.
Revenue
8
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 April 2, 2022 and April 3, 2021:
Landscaping Recovery Services Manufacturing and Sales of Mulch
Total
Three Months Ended
April 2, 2022 April 3, 2021
$ 936,474 $ 700,313 9,392,974 8,591,618 $ 10,329,448 $ 9,291,931
Cash
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 April 2, 2022 and April 3, 2021.
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 April 2, 2022 and January 1, 2022, the Company’s allowance for doubtful accounts was $60,000.
Receivable from Factor
As of April 2, 2022, there are $2,429,147 receivables 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.
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.
The Company has entered into a Receivables Facility on March 2, 2022. Under the Receivables Facility, we may sell a portfolio of available and eligible outstanding customer accounts receivable to the purchasers. The eligible accounts receivable consists of accounts receivable generated by sales to certain customers. The eligible amount of customer accounts receivables which may be sold under the Receivables Facility is $5,000,000. The Receivables Facility expires on July 2, 2023.
9
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 months ended April 2, 2022 and April 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 months ended April 2, 2022 and April 3, 2021.
Advertising and Marketing Costs
The Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were approximately $73,000 and $73,000 for the three months ended April 2, 2022 and April 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 April 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
$
(Level 2)
- $
-
Total fair value at April 2, 2022
$ 52
Quoted prices in active markets for identical Assets (Level 1) $ 52
Quoted prices in active markets
for identical
Significant other Observable inputs
Significant other Unobservable inputs (Level 3)
Total fair value at
Significant other Observable inputs
Significant other Unobservable inputs
10
January 1, 2022 Assets (Level 1) (Level 2)
Investment in mutual funds $ 52 $ 52 $
Net Income (Loss) per Common Share
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
- $
(Level 3)
-
Numerator for basic and diluted earnings (loss) per share:
Net income (loss) $
Denominator for basic earnings (loss) per share – weighted average shares outstanding
Stock warrants
Denominator for diluted earnings (loss) per share –
weighted average and assumed conversion Net income (loss) per share:
Basic net income (loss) per share Diluted net income (loss) per share
Income Taxes
April 3, 2021
$ (121,435)
89,014,501
5,640,004 -
April 2, 2022
76,161
89,440,108
$ $
94,654,505
0.00 0.00
89,440,108
$ (0.00) $ (0.00)
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 April 2, 2022 and April 3, 2021, the Company recognized approximately $22,000 and $97.000 tax expense, 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
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
11
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 April 2, 2022 and January 1, 2022:
April 2, 2022 3,498,795
January 1, 2022
$ $
April 2, 2022
Machinery and equipment $
Vehicles 4,405,512 Land 7,633,048 Buildings 6,234,718
$ $
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:
1,329,660 2,252,685 7,081,140
Leasehold improvements Construction in process
Less: accumulated depreciation Property and equipment, net
$
283,268 22,524,747 62,373,757 (6,872,643) 55,501,114
21,292,464
$
$
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 ended April 2, 2022 and April 3, 2021 was $836,616 and $800,616, 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.
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.
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• 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 April 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
$
17,228,295 1,883,657
15,344,638
Value of common stock issued for MM
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: Property and equipment
Investments
Prepaid expenses and other assets
Supply agreement
Accounts payable and accrued expenses
(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
17,228,295 830,000 192,361 453,750
(1,215,820)
13
Notes payable (4,000,000) $ 13,488,586
Day Dreamer Productions LLC Acquisition
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 April 2, 2022 and January 1, 2022:
Useful April 2, 2022 January 1, 2022 life
Supply contract (1) Less:
Total
(1)
Accumulated amortization Impairment
10 $
453,750 $ (54,450)
(317,500)
81,800 $
453,750 (51,810) (317,500) 84,440
$
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 7.75 years.
Amortization of identifiable intangible assets for the three months ended April 2, 2022 and April 3, 2021 was $2,640 and
$1,760, respectively.
The below table summarizes the future amortization expense for the next five years:
2022 $ 2023
2024
2025
2026 Thereafter
$
7,920 10,560 10,560 10,560 10,560 31,640 81,800
NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following amounts:
Accounts payable Accrued interest Accrued expenses
$ $
April 2, 2022
1,956,104 $ 25,104
388,771 2,369,979 $
January 1, 2022
2,350,056 8,076 313,644 2,671,776
NOTE 8 –NOTES PAYABLE
14
Apr 2, 2022
Jan 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
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.
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.
$
10,509,960
4,067,282 1,114,000 1,221,108
1,236,080 327,412 311,206 335,653 329,033 213,879 208,226 203,710 199,879 199,179
$
10,580,504
4,100,000 1,400,000 1,297,817
1,236,080 342,680 325,718 347,452 334,000 222,887 217,213 212,727 209,200 208,226
15
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
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 16
183,174 195,779 122,671 134,353 32,919 65,838
55,943 69,928
77,478 87,611 70,119 73,217
48,044 54,397
36,671 41,466
36,007 40,764
32,346 36,446
33,086 37,220 25,685 28,071 24,547 27,581 20,476 22,395
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 15,565
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 48,365
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 500,000
Note payable to a financing company bearing interest
at 25.0%. Weekly payments of principal and interest of $54,348 due through
March 2023 2,010,000
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 825,000
17,512 -0-
-0- -0- -0- -0-
21,967,082 4,486,461 $ 17,480,621
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
515,000 25,189,703 7,311,207 $ 17,878,496
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
$
Amount 5,565,138 5,065,953
& after
12,924,481 1,116,033 372,493 145,605 $ 25,189,703
The above notes include three Paycheck Protection Program (PPP) loans between MM and NSR LLC totaling $2,849,208, of which the $1,458,200 and $154,928 loans were forgiven during the year ended January 1, 2022. Under the PPP, to the extent the Company uses the loan proceeds on qualifying disbursements, these loans may be forgiven. Although the Company believes that the majority of the proceeds under the remaining loan of $1,236,080 has been spent on qualifying expenditures, it has not recorded any gain on forgiveness of this indebtedness for the period ended April 2, 2022
Related Party
On the January 31, 2020, date of the Mulch Acquisition, there was a balance on a note payable to MM’s sole shareholder in the amount of $14,223,046. This note was adjusted for the receivables and inventory of MM that was excluded from the share exchange resulting in a restated and amended $15,402,355 promissory note bearing 4% interest. Also on January 31, 2020, this shareholder placed a $6,240,670 deposit with the Company. To the extent the Company consumed this cash deposit for operations, this shareholder was paid 4% interest. In August 2021 the outstanding balance on these two obligations plus accrued interest as of January 2, 2021, totaled $17,484,728, which was contributed to the capital of the Company. Interest accrued on these obligations for 2021 was credited against interest expense. Accordingly, the balance on the shareholder deposit as of April 2, 2022 and January 1, 2022 was $-0- and $-0-, respectively. The balance on the restated and amended promissory note was $-0- and $-0- as of April 2, 2022 and January 1, 2022, respectively.
17
In January 2019, MM issued a promissory note to an employee in the amount of $6,000,000, $2,000,000 of which was paid during the year ended December 28, 2019. The note bore interest at 3% per annum payable quarterly, required semi-annual principal payments of $300,000 starting on June 1, 2021 and had no maturity date. As part of the Mulch Acquisition, this note was assumed by the Company. In August 2021, the holder of this note exchanged his, at that time, $3,700,000 balance in the note for 6,000,000 Company shares. As of April 2, 2022 and January 1, 2022, the balance on this note was $-0- and $-0-, respectively.
Total interest expense (credit) on the above related party notes and deposit was approximately $-0- and $188,000 for the three months ended April 2, 2022 and April 3, 2021, respectively.
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
18
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.
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
April 2, 2022
April 3, 2021
$ 17,792 5,506 38,293 _111,801 $173,392
$ 23,366 $ 38,293
2.6 years 1.8 years
10.0% 4.5%
April 2, 2022
801,752 $ 110,722 912,474 $
Amortization on ROU assets $ 17,792
Interest on lease liabilities 3,635 Operating lease cost 69,598 Short-term lease cost 44,220 Total lease cost $135,245
Cash paid for amounts included in the measurement of lease liabilities for:
Finance leases:
Financing cash flows $ 23,366
Operating leases:
Operating cash flows $ 46,932
Weighted-average remaining lease term:
Finance leases 1.6 years Operating leases 4.1 years
Weighted-average discount rate:
Finance leases 10.0%
Operating leases
Supplemental balance sheet information related to leases is as follows:
4.3%
Assets:
Operating lease assets Finance lease assets Total leased assets
Liabilities:
Financial Statement Line Item
ROU asset
$ $
Jan 1, 2022
848,840 128,515 977,355
19
Current:
Operating lease assets Finance lease assets
Non-current
Operating lease assets Finance lease assets
$
176,976 57,053 234,029
624,776 75,168 699,944 933,973
$
$
183,874 65,312 249,186
664,966 86,639 751,605 1,000,791
Total lease liabilities
$
Finance 53,727
Current portion of lease liability
Lease liabilities, net of current portion
As of April 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 160,502
168,570 139,469 107,969 106,553 220,235 903,298
(101,546) 801,752
and thereafter
54,172 40,629 - - - $ 148,528 (16,308) $ 132,220
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.
Stock Redemptions
20
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 April 2, 2022, the Company did not have any deposit amounts in excess of the FDIC insured limit.
Revenues
For the three months ending April 2, 2022 and April 3, 2021, one customer accounted for 19% and 25% of revenue, respectively.
Accounts Receivable
As of April 2, 2022, one customer accounted for 28% of the Company’s accounts receivable. As of January 1, 2022, one customer accounted for 24% of the accounts receivable.
NOTE 13 – SUBSEQUENT EVENTS
There are no material subsequent events.
21
I agree. Growth and expansion is still increasing. Five new 340B contracts reported in last PR will increase profit margins once again.
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Progressive Care Reports First Quarter 2022 Financial Results Highlighted by 5% Growth in Revenue to $10.1 Million
Adjusted EBITDA increased by approximately 53%, to $101,646
See on website
Miami, FL – May 17, 2022 – Progressive Care Inc. (OTCQB: RXMD) (the “Company”), a personalized healthcare services and technology provider, today announced financial and operational results for the three months ended March 31, 2022.
Key Financial Highlights for the Three Months Ended March 31, 2022 compared to the same period in 2021
• Revenue increased by 5%, from $9.6 million in 2021 to $10.1 million in 2022
• Gross margin decreased slightly to 24% in 2022 from 25% in 2021
• Operating loss decreased by 79%, from $0.6 million in 2021 to $0.1 million in 2022
• Adjusted EBITDA increased by 53% from $66,349 in 2021 to $101,646 in 2022
Business Highlights
• Strengthened management team with industry experts
• Expanded corporate services with enhanced COVID-19 platform capabilities
• Approved as COVID-19 test vendor in the U.S. for travel to Beijing Winter Olympic Games
• Engaged with Alteryx software implementation partner Aimpoint Digital to streamline healthcare data management workflows.
• Partnered with Podium to boost customer satisfaction, efficiency and brand awareness
• Gained long-term pharmacy contracts with major payors
• Announced expansion plans into the rapidly growing multi-billion dollar Remote Patient Monitoring space
• Gained SEC reporting status on April 11, 2022 through the filing of Form 10-12G Summary Financials for the Three Months Ended March 31, 2022, as Compared with the Three Months Ended March 31, 2021
Management Commentary
Alan Jay Weisberg, Chairman and Chief Executive Officer of Progressive Care, commented, “the first quarter of 2022 was an exciting period for the Company as we have begun a number of planned initiatives in line with our vision to become a diversified healthcare company. We have begun to realize the benefits of the operating efficiencies implemented and achieved reductions in operating expenses which resulted in significant improvement in our operating results. We also continued our progress towards uplisting to a national exchange market.”
Weisberg, continued, “Financially, we had a solid start to 2022, highlighted by our 5% revenue growth. Our quarterly revenue of $10.1 million demonstrates our team’s efforts in diversifying our products and services. With a further reduction of operating expenses as a percentage of revenue to 25% during the first quarter, the Company’s operating efficiency continues to improve as we scale our business. Our recent expansion into long-term care pharmacy contracts provides Progressive Care with an opportunity to significantly increase its sales that produce much better margins. In addition, we expect that future growth will be driven by new data management and virtual healthcare service lines; expansion of 340B Covered Entities Third Party Administrative services; market penetration in existing geographies; development of enhanced healthcare B2B services; development of cash-based products and services; and continued implementation of MTM protocols.” Weisberg, concluded, “We expect that growth in these revenue components will continue, as we have good momentum and we expect 2022 performance to reflect that. We look forward to updating the market and our shareholders with our progress on both our business and capital market initiatives over the next few months.”
Financial Results for Three Months Ended March 31, 2022
For the three months ended March 31, 2022 and 2021, we recognized overall revenue from operations of approximately $10.1 million and $9.6 million, respectively. Net pharmacy revenues increased by approximately $0.4 million for three months ended March 31, 2022 when compared to the same period in 2021. For the three months ended March 31, 2022, the increase in net pharmacy revenues was mainly attributable to an increase in COVID-19 testing revenue of $0.7 million which was offset by a decrease in 340B contract revenue of $0.3 million when compared to the same period in 2021. Prescription revenue for the three months ended March 31, 2022 was flat as compared to the same period in 2021.
Prescription revenues represented 86% and 90% of all revenue for the three months ended March 31, 2022 and 2021, respectively. Revenue from 340B contracts is 4% and 8% as a percentage of total net revenues for the three months ended March 31, 2022 and 2021, respectively. Dispensing fee and third-party administration revenue earned on our 340B contracts for the three months ended March 31, 2022, and 2021 were $0.4 million and $0.7 million, respectively, and decreased by $0.3 million for the three months ended March 31, 2022, when compared to the same period in 2021. The decrease is due to a significant decrease in the reimbursement rates for uninsured patients enrolled in the Gilead PREP program effective beginning the first quarter of 2022 that had an overall unfavorable impact on our 340B contract revenue in the amount of $0.2 million. We believe the decrease in 340B contract revenue will recover during the second quarter of 2022 as our existing covered entities continue enrolling patients in alternative programs and insurance plans that provide greater reimbursements.
We have filled approximately 111,000 and 116,000 prescriptions during the three months ended March 31, 2022 and 2021, respectively, a 4% period over period decrease in the number of prescriptions filled. The decrease in the number of prescriptions filled was due to our continued effort to decrease operating expenses as it relates to delivery costs by synchronizing dispensing of medications to the extent that we minimize the number of trips necessary to one patient. The synchronization of medication necessitates coordination of patient refills to ensure all patient prescriptions are dispensed at the same time and therefore cause a delay in some refills to be dispensed later. This might have a short-term impact on the overall number of prescriptions dispensed, however, it makes it simpler for the patient to manage multiple medications and provides us with the opportunity to manage costs associated with deliveries as well as providing a more productive workflow for our pharmacy team. The decrease in the number of dispensed prescriptions during the first quarter of 2022 has also been adversely impacted by the recent changes in the Gilead PREP program for uninsured patients and the reenrollment requirements.
For the three months ended March 31, 2022 and 2021, we have earned approximately $1.3 million and $0.6 million, respectively from COVID-19 testing. We have recorded 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 cases of COVID-19 infections and demand for COVID-19 testing have slowed down. It is difficult to predict whether these conditions will be recurring given recent COVID-19 pandemic conditions in Florida. We are well positioned to react if another COVID-19 outbreak occurs as we have built a reputation of being a highly reliable partner for COVID-19 testing solutions. We have built reputable relationships with well-known productions companies and these relationships provide us with recurring COVID-19 testing revenue.
Gross profit margins decreased from 25% for the three months ended March 31, 2021, to 24% when compared to the same period in 2022, largely due to the decrease in 340B contract revenue.
Our operating expenses decreased by approximately $0.6 million, or 18%, for the three months ended March 31, 2022 when compared to the same period in 2021. The decrease was mainly attributable to the following:
• Decrease in salaries, wages an employee related expenses due to period over period decrease in headcount, and less time invested in training on pharmacy software when compared to 2021 in the amount of $0.1 million;
• Decrease in consulting fees in the amount of $0.1 million;
• Decrease in rent expense due to non-recurring leasehold improvement related expenses in the amount of $0.2 million;
• Decrease in amortization expense due to intangible assets being fully amortized in the amount of $0.1 million;
• Decrease in other operating expenses in the amount of $0.1 million.
Operating expenses as a percentage of revenue declined to 25% for the three months ended March 31, 2022, when compared to 32% for the three months ended March 31, 2021, reflecting the Company’s continued focus on operation optimization and efficiency.
Operating loss decreased by approximately $0.5 million, or 79%, to $0.1 million for the three months ended March 31, 2022, when compared to $0.6 million for the same period in 2021, because of decreases in overall operating expenses.
Adjusted EBITDA increased by approximately $35,297, or 53%, to $101,646 for the three months ended March 31, 2022, when compared to $66,349 EBITDA for the same period in 2021.
Net loss for the three months ended March 31, 2022 was $1.4 million, compared to a net income of $26,852 for the same period in 2021. The increase in net loss is mainly attributable to non-operating items such as gain on debt settlement and loss from the adverse change in the fair value of the derivative liability, offset by a reduction in the loss from operations period over period.
Cash balance was $2.4 million at March 31, 2022, as compared to $1.4 million at December 31, 2021.
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
phone: (917) -658-7878
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No news since November 2021. That’s what I miss.
News out!
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Progressive Care Gains Long Term Care Contracts with Major Payors
See on website
MIAMI, FL – May 4, 2022 – Progressive Care Inc. (OTCQB:RXMD) (“Progressive Care” or the “Company”), a personalized healthcare services and technology company, is excited to announce its long term care division gained all the necessary long-term care contracts with major payors.
“Our long history of enhanced patient care, as well as robust data management platform and logistics network are key elements that will facilitate the success of our long-term care business. The long-term care pharmacy contracts provide Progressive Care with an opportunity to significantly increase its sales that produce much better margins. Our Chief Operating Officer, Birute Norkute, has successfully executed on completing this complicated and tidies process and instituting final and imperative steps for the successful launch of our LTC marketing program. We are excited about LTC business and confident in our ability to deliver strong results.” Stated Jay Weisberg, CEO of Progressive Care Inc.
PharmcoRx long-term care division pharmacy services include a combination of adherence tools, clinical pharmacy services, patient navigation and engagement, real-time collaboration with the patient’s caregivers, medication reconciliation post-discharge, monthly medication reviews, 24/7 access to clinical pharmacy support through the Company’s online platform, automated Rx refill management, specialty adherence packaging that includes the Company’s successful Smart-Pack adherence packaging and free same-day delivery.
Carlos Rangel, Head of Digital Transformation of Progressive Care Inc. stated “The expansion into long-term care will complement perfectly with the company’s recently announced plan to expand into a Remote Patient Monitoring space. The capability to provide real-time insights from the high-risk patients will not only help physicians make well-informed decisions but will also enhance the patient experience and promote positive outcomes in a long-term care setting.”
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
PharmCo Rx Pharmacy
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
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I would settle for a LETTER TO SHAREHOLDERS.
Boy , nearsightedness must be contagious. Some investors can’t see past their nose. There is a bigger picture if you put on your glasses, even the rose colored ones.
Why postpone? Uplisting doesn’t expire until February 2023.
Let’s not forget the insider buying also, all great positives.
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GlobeNewswire
Progressive Care Chooses Podium to Boost Customer Satisfaction, Efficiency, and Brand Awareness
Progressive Care, Inc.
January 25, 2022·3 min read
MIAMI, FL, Jan. 25, 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 the company has implemented Podium (www.podium.com), a two-way communication platform, to connect patients and medical offices with the company’s entire support team.
This integrated solution will help Progressive Care to:
? Provide statistics on internal performance, including response time, customer satisfaction, and average payments per user
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Do This Instead Of Cleaning Gutters (It's Genius!)
? Provide patients with an easy way to review and recommend Progressive Care services online, boosting the Company’s local SEO presence significantly
? Implement keyword-based automation through chat, helping patients seamlessly connect with the proper team member to drive customer satisfaction
“With Podium, patients and medical offices are able to quickly get in touch with our team of over 100 pharmacy technicians and solve issues in a seamless way, cutting waiting times in half for prescription-related issues or COVID-19 testing information,” remarked Alan Jay Weisberg, CEO of Progressive Care. “Overall, this new set of resources will drive efficiency and customer satisfaction, while providing a meaningful local marketing boost for our individual pharmacy location through Google my Business, Facebook, and many other online platforms.”
"We're proud to support the Progressive Care team to help them better serve the patients in their communities, particularly at a time when access to in-home and onsite rapid COVID-19 testing and care is so critical," said Steve Garcia, Vice President of Sales at Podium.
For more information about Progressive Care, please visit the company’s website.
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RXMD has until February 2023 to RS.
I agree. RXMD is out of the starting blocks. April is also BIG WHALE season, maybe we’ll attract a few. Congratulations RXMD!!
News out!!
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Progressive Care Gains SEC Reporting Status
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Miami, FL – April 12, 2022 – Globe Newswire via NewMediaWire – Progressive Care, Inc. (OTCQB: RXMD) (the “Company”), a personalized healthcare services and technology provider, today announced that, effective April 11, 2022, its Registration Statement on Form 10 filed with the U.S. Securities and Exchange (the “SEC”) to register its shares of common stock under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) became automatically effective.
The effective Form 10 obligates the Company to file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in addition to complying with all other obligations under the Exchange Act. In addition, management and certain shareholders are subject to the beneficial ownership reporting requirements of Section 13 and 16 of the Exchange Act.
Alan Jay Weisberg, Chairman and Chief Executive Officer of the Company said, “For me, it was always important to have the Company become fully reporting with the SEC. I know how critical it is for individual and institutional investors to have the Company file its financial reports with the SEC as it provides a higher level of confidence in the information reported by the Company and a superior level of transparency. I believe that the Company’s compliance with the Exchange Act will ultimately help drive shareholder value and enable us to access higher quality institutional capital. We remain committed to strong corporate governance and steadfast in pursuit of our journey to Nasdaq.”
To view the Form 10 filling, please click:
https://www.sec.gov/Archives/edgar/data/0001402945/000149315222009357/form10-12ga.htm
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
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