MANGOCEUTICALS INC
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
MGRX$0.19+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001493152-24-019960
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032410
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 162 current paragraphs.
83 unchanged; 33 reworded; 36 added; 19 removed; 0 previous and 10 current paragraphs rearranged.
Tables are not compared: 5 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
Overview
Current report
We connect consumers to licensed healthcare professionals through our website atwww.MangoRx.com, for the provision of care via telehealth on our customer portal. We also provide access for customers to a licensed pharmacy for online fulfillment and distribution of certain medications that may be prescribed as part of telehealth consultations. To date, we have identified men’s wellness telemedicine services and products as a growing sector in recent years and especially related to the areas of erectile dysfunction (“ED”), hair growth products and hormone therapies. Our products currently consist of the following:
Current report
Recent Events
Current report
In addition to the recent funding events and agreements described in greater detail below under “Liquidity and Capital Resources—Recent Events”, the following material transactions took place during the six months ended June 30, 2024:
Current report
Master Distribution Agreement
Current report
On July 9, 2024, we entered into a Master Distribution Agreement with ISFLST, Inc. (“ISFLST”) dated July 2, 2024 (the “Distribution Agreement”). Pursuant to the Distribution Agreement, we agreed to sell, and ISFLST agreed to purchase, certain of our products, including our MangoRx Grow and Mango ED products (collectively, the “Products”), for distribution and resale by ISFLST during the term of the agreement.
Current report
Pursuant to the Distribution Agreement, ISFLST agreed to use commercially reasonable efforts to sell and promote the sale of the Products in Asia Pacific and Latin America (excluding Mexico), and we provided ISFLST a non-exclusive, non-transferable license to market and sell the Products, and grant sub-licenses (subject to certain pre-requisites and limitations described in greater detail in the Distribution Agreement) to sell the Products, in the Market. We also agreed, subject to certain future mutually agreed milestones that ISFLST could earn exclusive rights to market the Products in the applicable “Market”.
Current report
The Distribution Agreement has a term of three years and is automatically renewable thereafter for three additional one year terms, unless either party provides the other notice of non-renewal at least 90 days prior to an automatic renewal date. The agreement may also be terminated by the non-breaching party upon the material breach of the agreement by the counterparty and failure to cure such breach after 90 days written notice, or upon insolvency.
Current report
The Distribution Agreement includes customary confidentiality requirements of the parties, representations and warranties of the parties, mutual indemnification rights, disclaimers of warranties and limitation of liabilities, and force majeure provisions.
Current report
The Distribution Agreement also includes a non-solicitation obligation of ISFLST, which applies during the term of the agreement and for two years thereafter.
Current report
All pricing information will be mutually agreed to by the parties and set forth in a separate purchase order, subject to availability and volume requirements.
Current report
Gross Profit
Current report
We had gross profit of $69,792 and $87,130 for the three months ended June 30, 2024 and 2023, respectively, which gross profit decreased due to an increase in shipping costs and the Company offering various discounts and incentives to attract first time customers.
Current report
We had total general and administrative expenses of $850,704 and $567,655, for the three months ended June 30, 2024 and 2023, respectively, an increase of $264,662 from the prior period.
Current report
Salary and benefits were $259,105 and $374,396 for the three months ended June 30, 2024 and 2023, respectively, which decreased due to the Company’s reduction and consolidation of certain employees and operating staff.
Current report
Advertising and marketing expenses in the amount of $229,244 and $797,263, for the three-months ended June 30, 2024 and 2023, respectively, related to the decrease in our advertising and marketing efforts in connection with the expansion and development of our new telemedicine platform.
Current report
We had interest expense (amortization on discount) of $222,678 for the three months ended June 30, 2024, compared to $0 for the three months ended June 30, 2023, which was in connection with our Series B Preferred Stock offering. The discount on convertible preferred stock is amortized over the term until conversion, which is expected to be within six months.
Current report
Comparison of the six months ended June 30, 2024 and 2023
Current report
Revenues
Current report
Revenue increased by $135,299 or 55.9% for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due to the Company increasing its digital marketing efforts and through recurring customer subscriptions.
Current report
Cost of Revenues
Current report
We had cost of revenues of $50,460 and $49,345 for the six months ended June 30, 2024 and 2023, respectively, attributed to costs associated with the Company’s third party doctor’s network and product shipping costs, and related party cost of revenues of $109,608 and $48,285 for the six months ended June 30, 2024 and 2023, respectively, relating to amounts paid to Epiq Scripts, a related party, 51% owned and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer, which entity provides us pharmacy and compounding services.
Current report
Cost of revenues increased for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, directly corelated to the increase in products sold.
Current report
Gross Profit
Current report
Operating Expenses
Current report
Salary and benefits were $552,314 and $396,094 for the six months ended June 30, 2024 and 2023, respectively, which increased due to an increase in our internal operational workforce.
Current report
Other Expense
Current report
We had interest expense (amortization on discount) of $222,678 for the six months ended June 30, 2024, compared to $0 for the six months ended June 30, 2023, which was in connection with our Series B Preferred Stock offering. The discount on convertible preferred stock is amortized over the term until conversion, which is expected to be within six months.
Current report
Net Loss
Current report
Net cash provided by financing activities was $2,255,770 for the six months ended June 30, 2024, which was mainly due to $1,500,000 of proceeds from the sale of preferred stock for cash, relating to shares of Series B Preferred Stock sold during the period (see “Securities Purchase Agreement”, below) and $568,270 of proceeds from the sale of common stock for cash relating to proceeds received from the Follow On Offering and our ELOC.
Current report
On April 26, 2024, the Company partially closed a planned second closing under the SPA (the “Second Closing”), the Purchaser paid $150,000 to the Company, and in consideration therefore the Company issued the Purchaser 150 shares of Series B Preferred Stock.
Current report
On May 17, 2024, the Company closed the remaining portion of the Second Closing, the Purchaser paid $100,000 to the Company, and in consideration therefore the Company issued the Purchaser 100 shares of Series B Preferred Stock.
Current report
On April 28, 2024, the Company and the Purchaser entered into an Omnibus Amendment Agreement No. 1 (the “Amendment”), which amended the SPA to, adjust the closings which were to take place under the SPA as follows:
Current report
As described in the table above, the sale of an additional 1,000 shares of Series B Preferred Stock in the Fourth Closing is subject to certain conditions to closing and is expected to occur within 180 days after the shares of common stock issuable upon conversion of the Series B Preferred Stock sold in the Initial Closing, Second Closing, Third Closing and Fourth Closing, have been registered under the Securities Act.
Current report
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024.
Current report
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.
Removed paragraphs (19)
Previous report
Salary and benefits of $239,209 and $177,918 for the quarters ended March 31, 2024 and 2023, respectively, which increased due to the engagement of new employees as we ramped up our operations in the current period.
Previous report
Net cash provided by financing activities was $267,500 for the three months ended March 31, 2024, which was mainly due to $87,500 of related party borrowing and $180,000 from the sale of common stock.
Previous report
Pursuant to the SPA, the sale of the Series B Preferred Stock and Warrants is to take place over up to three closings as follows:
Previous report
On the Initial Closing Date, the Company sold the Purchaser 500 shares of Series B Preferred Stock (the “Initial Closing Shares”) and the Warrants, for an aggregate of $500,000. As described in the table above, the sale of an additional 250 shares of Series B Preferred Stock for $250,000, is to occur upon the earlier of the mutual approval of the Company and the Purchaser, and three business days after the Stockholder Approval and Effectiveness (as defined below); and the sale of an additional 750 shares of Series B Preferred Stock is expected to occur upon Stockholder Approval and Effectiveness.
Previous report
The Series B Preferred Stock each have an initial stated value of $1,100 per share, and as a result, the effective purchase price of the Series B Preferred Stock shares sold, and agreed to be sold to the Purchaser, without taking into account the Warrants, is a 10% discount to the stated value thereof.
Previous report
The consummation of the Second Closing and Third Closing contemplated by the SPA, are subject to various customary closing conditions as well as Stockholder Approval and Effectiveness (as hereinafter defined).
Previous report
Pursuant to the SPA, the Company agreed that until Stockholder Approval (as defined below) is obtained, the Company would not issue any shares of common stock upon conversion of the Series B Preferred Stock or upon exercise of the Warrants, to the extent that after giving effect thereto, the aggregate number of shares of common stock that would be issued pursuant to the SPA and the ELOC (as defined below), and the other transaction documents entered into in connection therewith would exceed 4,721,538 shares of common stock (representing 19.99% of the number of shares of common stock issued and outstanding immediately prior to the execution of the SPA) (such maximum number of shares, the “Exchange Cap”).
Previous report
The SPA requires us, as soon as practicable after the Initial Closing Date, but in any event no later than 30 days thereafter (the “Stockholder Meeting Deadline”), to hold a meeting of stockholders to seek approval of a waiver of the Exchange Cap and, if needed, an increase in the authorized number of shares of common stock (approval of all such proposals, the “Stockholder Approval”), by providing each stockholder of the Company a proxy statement. If, despite the Company’s best efforts, the Stockholder Approval is not obtained on or prior to the Stockholder Meeting Deadline, we are required to hold additional stockholder meetings, at least semi-annually until such Stockholder Approval is obtained. “Effectiveness” means the Securities and Exchange Commission (SEC) declaring effective the registration statement required to be filed pursuant to the Registration Rights Agreement, discussed below.
Previous report
The SPA also provides the Purchaser the option (the “Option”) to purchase an additional $1,100,000 (based on the stated value of the Series B Preferred Stock) of Series B Preferred Stock (the “Option Shares”, and the shares of common stock issuable upon conversion of the Option Shares, the “Option Conversion Shares”). The purchase price to be paid for the Option Shares is $1,000,000 (the “Option Price”), and the Option can be exercised at any time on or before the date that is six months following the date of the Third Closing.
Previous report
Warrants
Previous report
At the Initial Closing, the Company issued the Purchaser the Warrants to purchase up to 3,300,000 shares of common stock. The exercise price of the Warrants is $0.26 (the “Exercise Price”). The Exercise Price is subject to adjustment in the event of customary stock splits, stock dividends, combinations or similar events. If at any time following the 120 th day after the Initial Closing, there is no effective registration statement registering, or the prospectus contained therein is not available for the shares of common stock issuable upon exercise of the Warrants, the Warrants can be exercised on a cashless basis and the Company is subject to certain liquidated damages and damages as described in greater detail in the Common Share Purchase Warrant entered into on the Initial Closing Date to evidence the Warrants (the “Warrant Agreement”).
Previous report
The Warrants contain provisions that prohibit exercise if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of the Company’s shares of common stock outstanding immediately after giving effect to such exercise. The holder of the Warrants may increase or decrease this percentage, but not in excess of 9.99%, by providing at least 61 days’ prior notice to the Company. In the event of certain corporate transactions, the holder of the Warrants will be entitled to receive, upon exercise of the Warrants, the kind and amount of securities, cash or other property that the holder would have received had it exercised the Warrants immediately prior to such transaction.
Previous report
If the Company or any subsidiary at any time while the Warrants are outstanding, shall sell, enter into an agreement to sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any common stock or common stock equivalents, at an effective price per share less than the exercise price of the Warrants then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the exercise price shall be reduced and only reduced to equal the Base Share Price. No adjustment however is to be made for certain customary Exempt Issuances (as defined in the SPA).
Previous report
The Warrants also include customary buy-in rights in the event the Company fails to timely deliver the shares of common stock issuable upon exercise thereof.
Previous report
If at any time the Warrants are outstanding there occurs any share split, share dividend, share combination recapitalization or other similar transaction involving the common stock (each, a “Share Combination Event”, and such date thereof, the “Share Combination Event Date”) and the Event Market Price (defined below) is less than the then exercise price then in effect, then on the sixth trading day immediately following such Share Combination Event Date, the exercise price then in effect on such sixth trading day is automatically reduced (but in no event increased) to the Event Market Price. The “Event Market Price” means, with respect to any Share Combination Event Date, the quotient determined by dividing (x) the sum of the volume weighted average price of the common stock for each of the five trading days ending and including the trading day immediately preceding the sixth trading day after such Share Combination Event Date, divided by (y) five.
Previous report
Additional conditions to the sale of any Advance Shares to the Purchaser include that such sale, together with the Commitment Shares, and any other shares required to be aggregated therewith pursuant to the rules of Nasdaq, would exceed 4,721,538 shares of common stock (representing 19.99% of the number of shares of common stock issued and outstanding immediately prior to the execution of the ELOC); the issuance of the Advance Shares would cause the Purchaser to beneficially own more than 4.99% of the Company’s then outstanding common stock; and/or without the prior written consent of the Purchaser, the Company has entered into a variable rate transaction.
Previous report
Registration Rights Agreement
Previous report
Recent Acquisition Transaction
Previous report
In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06,“Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40)”(“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company evaluated and determined there is no material effect on the financial statements at this time.
Reworded paragraphs (33)
Previous wording
Certain capitalized terms used below but not otherwise defined, are defined in, and shall be read along with the meanings given to such terms in, the notes to the unaudited consolidated financial statements of the Company for the quarters ended March 31, 2024 and 2023, above.
Current wording
Certain capitalized terms used below but not otherwise defined, are defined in, and shall be read along with the meanings given to such terms in, the notes to the unaudited consolidated financial statements of the Company for the three and six months ended June 30, 2024 and 2023, above.
Previous wording
We had a working deficit of $1.1 million as of March 31, 2024. With our current cash on hand, expected revenues, and based on our current average monthly expenses, we currently anticipate the need for additional funding in order to continue our operations at their current levels and to pay the costs associated with being a public company for the next 12 months. We may also require additional funding in the future to expand or complete acquisitions.
Current wording
We had a working deficit of $0.9 million as of June 30, 2024. With our current cash on hand, expected revenues, and based on our current average monthly expenses, we currently anticipate the need for additional funding in order to continue our operations at their current levels and to pay the costs associated with being a public company for the next 12 months. We may also require additional funding in the future to expand or complete acquisitions.
Previous wording
We began generating revenues in November 2022 and had revenues of $214,095 and $100,722 for the three months ended March 31, 2024 and 2023, respectively.
Current wording
We began generating revenues in November 2022 and had revenues of $163,163 and $141,237 for the three months ended June 30, 2024 and 2023, respectively.
Previous wording
Revenue increased by $113,373 or 113% for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due to increased marketing and brand recognition.
Current wording
Revenue increased by $21,926 or 15.5% for the three months ended June 30, 2024, compared to the three months ended March 31, 2023, due to the Company increasing its digital marketing efforts and through recurring customer subscriptions.
Previous wording
We had cost of revenues of $20,795 and $23,753 for the three months ended March 31, 2024 and 2023, respectively, relating to improved margins and related party cost of revenues of $45,902 and $19,770 for the three months ended March 31, 2024 and 2023, respectively, relating to amounts paid to Epiq Scripts, LLC (“Epiq Scripts”), a related party, 51% owned and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer, which entity provides us pharmacy and compounding services, resulting in gross profit of $147,398 and $57,199 for the three months ended March 31, 2024 and 2023, respectively. The related party cost of revenues was associated with a Master Services Agreement entered into with Epiq Scripts and a related statement of work and the remaining cost of revenues was attributed to the amounts paid to our unrelated party doctors network and shipping expenses.
Current wording
We had cost of revenues of $29,665 and $25,592 for the three months ended June 30, 2024 and 2023, respectively, attributed to costs associated with the Company’s third party doctor’s network and product shipping costs, and related party cost of revenues of $63,706 and $28,515 for the three months ended June 30, 2024 and 2023, respectively, relating to amounts paid to Epiq Scripts, LLC (“Epiq Scripts”), a related party, 51% owned and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer, which entity provides us pharmacy and compounding services. The related party cost of revenues was associated with a Master Services Agreement entered into with Epiq Scripts and a related statement of work and the remaining cost of revenues was attributed to the amounts paid to our unrelated party doctors network and shipping expenses.
Previous wording
Cost of revenues increased for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due to increased units sold.
Current wording
Cost of revenues increased for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, directly corelated to the increase in products sold.
Previous wording
The decrease in general administration expenses for the quarter ended March 31, 2024, compared to the prior period, was due primarily to reduced cost related to our legal fees of $122,047 and $139,578 for the quarters ended March 31, 2024 and 2023, respectively, mainly related to legal fees in connection with our initial public offering and related matters. Placement agent fees of $12,600 and $400,000, for the quarters ended March 31, 2024 and 2023, respectively, relating to fees paid to our placement agent in connection with our private placement and initial public offerings. Accounting and auditing fees of $38,339 and $56,600, for the quarters ended March 31, 2024 and 2023, respectively, which was in connection with fees paid to our accountants and auditors in connection with the preparation of the financial statements for our initial public offering , quarterly reviews, and annual filing. General consulting related expenses of $111,658 and $163,513, for the quarters ended March 31, 2024 and 2023, respectively, related to other various consulting fees paid in connection with our operations in the current period. Software development fees of $171,861 and $131,420 for the quarters ended March 31, 2024 and 2023, respectively, related to the front and backend development of our website in the current period. Software development expenses are integral to customers accessing our ordering system and successfully placing an order for our products.
Current wording
The increase in general administration expenses for the quarter ended June 30, 2024, compared to the prior period, was due primarily to increased cost related to our legal fees of $165,368 and $106,560 for the quarters ended June 30, 2024 and 2023, respectively, mainly related to legal fees in connection with our follow-on offering, preferred offering and related matters. Accounting and auditing fees of $27,744 and $6,744, for the quarters ended June 30, 2024 and 2023, respectively, which was in connection with fees paid to our accountants and auditors in connection with the preparation of the financial statements for our quarterly reviews, and annual filing. General consulting related expenses of $108,651 and $52,023, for the quarters ended June 30, 2024 and 2023, respectively, related to other various consulting fees paid in connection with our operations in the current period. Software development fees of $239,520 and $79,680 for the quarters ended June 30, 2024 and 2023, respectively, related to the front and backend development of our website in the current period. Software development expenses are integral to customers accessing our ordering system and successfully placing an order for our products. We had loss on sale of assets of $18,387 for the three months ended June 30, 2024, compared to $0 for the three months ended June 30, 2023. On May 15, 2024, the Company disposed of $119,819 of equipment to Epic Scripts, a related party, in an arm’s length transaction. The equipment was sold for $65,000, realizing a loss on sale of assets of $18,837.
Previous wording
We had $143,000 of investor relations expenses for the three months ended March 31, 2024, related to awareness of our stock to the public market, compared to $0 of investor relations expenses for the three months ended March 31, 2023.
Current wording
We had $40,000 of investor relations expenses for the three months ended June 30, 2024, related to awareness of our stock to the public market, compared to $90,500 of investor relations expenses for the three months ended June 30, 2023.
Previous wording
IPO, Stock-based compensation totaled $454,465 and $764,271 (including a total of $416,340 and $700,000 attributed to stock issued for services and $37,965 and $64,271 attributed to stock-based compensation from issuances of options and warrants), respectively, which decrease was due to us having issued less stock for compensation during the 2024 period.
Current wording
Stock-based compensation totaled $859,380 and $549,574 (including a total of $416,340 and $700,000 attributed to stock issued for services and $37,965 and $64,271 attributed to stock-based compensation from issuances of options and warrants), for the six months ended June 30, 2024 and 2023, respectively, which increase was mainly due to bonuses issued to certain officers, directors and employees for services rendered.
Previous wording
We had imputed interest expense of $0 and $1,760 (which represented imputed interest on the related party loans which were repaid in 2023, as discussed below under “Liquidity and Capital Resources”) for the quarters ended March 31, 2024 and 2023, respectively.
Current wording
We had imputed interest expense of $0 and $8,233 (which represented imputed interest on the related party loans which were repaid in 2023, as discussed below under “Liquidity and Capital Resources”) for the quarters ended June 30, 2024 and 2023, respectively.
Previous wording
We had total general and administrative expenses of $771,958 and $1,297,271, for the three months ended March 31, 2024 and 2023, a decrease of $525,313 from the prior period.
Current wording
We had total general and administrative expenses of $1,622,662 and $1,951,614, for the six months ended June 30, 2024 and 2023, respectively, a decrease of $347,339 from the prior period.
Previous wording
Advertising and marketing expenses in the amount of $852,383 and $284,364, for the quarters ended March 31, 2024 and 2023, respectively, related to us increasing our advertising and marketing costs in the 2024 period as we ramped up our marketing efforts in connection with the expansion of our operations.
Current wording
Advertising and marketing expenses in the amount of $1,081,627 and $912,997, for the six months ended June 30, 2024 and 2023, respectively, related to us increasing our advertising and marketing costs in the 2024 period as we expanded our marketing efforts in connection with the expansion of our operations.
Previous wording
We had a net loss of $2,367,617 and $2,560,885 for the quarters ended March 31, 2024 and 2023, respectively, representing a decrease in net loss of $193,268 or 8% from the prior period, for the reasons discussed above.
Current wording
We had a net loss of $4,758,560 and $4,844,910 for the six months ended June 30, 2024 and 2023, respectively, representing a decrease in net loss of $86,350 or 1.8% from the prior period, for the reasons discussed above.
Previous wording
As of March 31, 2024, we had $15,305 of cash on-hand, compared to $739,006 of cash on-hand of December 31, 2023. We also had $60,051 of prepaid expenses, related party, relating to amounts funded to Epiq Scripts, which is 51% owned and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer, $14,452 of inventory; $89,905 of property and equipment, net, consisting of computers, office and custom product packaging equipment, $16,942 of security deposit, representing the security deposit on our leased office space and $104,792 of right of use asset in connection with our office space lease. Cash decreased mainly due to funds used for general operating expenses.
Current wording
As of June 30, 2024, we had $490,243 of cash on-hand, compared to $739,006 of cash on-hand of December 31, 2023. We also had $13,299 of prepaid expenses, related party, relating to amounts funded to Epiq Scripts, which is 51% owned and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer, $14,019 of inventory; $3,313 of property and equipment, net, consisting of computers and general office equipment, $16,942 of security deposit, representing the security deposit on our leased office space, $90,011 of right of use asset in connection with our office space lease and $14,610,000 of patents, which we acquired pursuant to the Patent Purchase Agreement described in greater detail above under “Recent Events—Patent Purchase Agreement”
Previous wording
As of March 31, 2024, the Company had total current liabilities of $1,212,202, consisting of $1,015,945 of accounts payable and accrued liabilities, $35,000 of accounts payable and accrued liabilities, related parties, relating to salaries accrued to officers of the Company, $8,203 of payroll tax liabilities, $87,500 of notes payable to related parties, relating to loans to the Company by our CEO and an entity owned by our CEO, and $65,554 of right-of-use liability, operating lease, current portion. We also had $47,713 of right-of-use liability, long-term.
Current wording
As of June 30, 2024, the Company had total current liabilities of $1,378,265, consisting of $718,650 of accounts payable and accrued liabilities, $4,687 of payroll tax liabilities, $187,500 of notes payable to related parties, relating to loans to the Company by our CEO and an entity owned by our CEO, $67,428 of right-of-use liability, operating lease, current portion, and $400,000 of other liabilities related to purchase of intellectual property. We also had $30,117 of right-of-use liability, long-term.
Previous wording
As of March 31, 2024, we had a working deficit of $1.1 million and a total accumulated deficit of $13,595,754.
Current wording
As of June 30, 2024, we had a working deficit of $0.9 million and a total accumulated deficit of $15,986,733.
Previous wording
We have mainly relied on related party loans, as well as funds raised through the sale of securities, mainly through the private placement offering, our IPO and our Follow On Offering, each discussed below, and revenues generated from sales of our Mango ED and Mango GROW products, to support our operations since inception. We have primarily used our available cash to pay operating expenses. We do not have any material commitments for capital expenditures, except pursuant to the terms of the SPA and ELOC, discussed in greater detail below.
Current wording
We have mainly relied on related party loans, as well as funds raised through the sale of securities, mainly through the private placement offering, our IPO and our Follow On Offering, each discussed below, and revenues generated from sales of our Mango ED, Mango GROW, and Prime products, to support our operations since inception. We have primarily used our available cash to pay operating expenses. We do not have any material commitments for capital expenditures, except pursuant to the terms of the SPA and ELOC, discussed in greater detail below.
Previous wording
To support our existing operations or any future expansion of business, including the ability to execute our growth strategy, we must have sufficient capital to continue to make investments and fund operations. We have plans to pursue an aggressive growth strategy for the expansion of operations through marketing to attract new customers for our Mango ED and Mango GROW products.
Current wording
To support our existing operations or any future expansion of business, including the ability to execute our growth strategy, we must have sufficient capital to continue to make investments and fund operations. We have plans to pursue an aggressive growth strategy for the expansion of operations through marketing to attract new customers for our Mango ED, Mango GROW, and Prime products.
Previous wording
Net cash used in operating activities was $991,131 for the three months ended March 31, 2024, which was mainly due to $2,409,348 of net loss, offset by $416,500 of common stock issued for services, and $910,180 of accounts payable and accrued liabilities related parties.
Current wording
Net cash used in operating activities was $2,568,367 for the six months ended June 30, 2024, which was mainly due to $4,758,936 of net loss, offset by $1,224,900 of common stock issued for services, and $577,885 of accounts payable and accrued liabilities related parties.
Previous wording
Net cash used in operating activities was $1,808,302 for the three months ended March 31, 2023, which was mainly due to $2,560,885 of net loss offset by $700,000 of common stock issued for services and $64,271 of options vested for stock-based compensation.
Current wording
Net cash used in operating activities was $3,588,886 for the six months ended June 30, 2023, which was mainly due to $4,844,910 of net loss offset by $1,087,000 of common stock issued for services and $128,542 of options vested for stock-based compensation.
Previous wording
Net cash used in investing activities was $3,519 for the three months ended March 31, 2023, which was due to the purchase of equipment. There was no net cash used in investing activities for the three months ended March 31, 2024.
Current wording
Net cash used in investing activities was $3,519 for the six months ended June 30, 2023, which was due to the purchase of equipment. There was $65,000 net cash provided by investing activities for the six months ended June 30, 2024.
Previous wording
Net cash provided by financing activities was $5,000,000 for the three months ended March 31, 2023, which was mainly due to $5,000,000 of proceeds from the sale of common stock in our IPO, discussed below.
Current wording
Net cash provided by financing activities was $5,857,040 for the six months ended June 30, 2023, which was mainly due to $5,000,000 of proceeds from the sale of common stock in our IPO, discussed below.
Previous wording
On June 29, 2022, the Company received an advance of $25,000 from Cohen Enterprises, which is owned by Mr. Cohen, the Chairman and Chief Executive Officer of the Company, who is also the majority shareholder of the Company, in order to cover various general and administrative expenses. The Company repaid Cohen Enterprises $25,000 on August 18, 2022 and the remaining $89,200 on April 4, 2023, bringing the total amount owed to Cohen Enterprises to $0 as of December 31, 2023. The Company further recorded a credit of $6,473 towards imputed interest, as other income (previously calculated at a rate of 8% per annum) against the related party advances for the year ended December 31, 2023.
Current wording
On June 29, 2022, the Company received an advance of $25,000 from Cohen Enterprises, which is owned by Mr. Cohen, the Chairman and Chief Executive Officer of the Company, who is also the majority shareholder of the Company, in order to cover various general and administrative expenses. The Company repaid Cohen Enterprises $25,000 on August 18, 2022 and the remaining $89,200 on April 4, 2023, bringing the total amount owed to Cohen Enterprises to $0 as of December 31, 2023. The Company further recorded a credit of $8,223 and $6,473 towards imputed interest, as other income (previously calculated at a rate of 8% per annum) against the related party advances for the three and six months ended June 30, 2023.
Previous wording
The net proceeds to the Company from the Offering, after deducting the underwriting discounts and commissions and offering expenses, were approximately $1.0 million. The Company used the net proceeds from the Offering to finance the marketing and operational expenses associated with the planned marketing of its Mango ED and GROW hair growth products, to develop and maintain software, and for working capital and other general corporate purposes.
Current wording
The net proceeds to the Company from the Offering, after deducting the underwriting discounts and commissions and offering expenses, were approximately $1.0 million. The Company used the net proceeds from the Offering to finance the marketing and operational expenses associated with the marketing of its Mango ED and GROW hair growth products, to develop and maintain software, and for working capital and other general corporate purposes.
Previous wording
Effective on April 5, 2024 (the “Initial Closing Date”), we agreed to definitive terms on a Securities Purchase Agreement dated April 4, 2024 (the “SPA”), with an institutional accredited investor (the “Purchaser”), pursuant to which the Company agreed to sell to the Purchaser, and the Purchaser agreed to purchase from the Company, 1,500 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) of the Company for $1,650,000, and warrants (the “Warrants”, and the shares of common stock issuable upon exercise thereof, the “Warrant Shares”), to purchase up to 3,300,000 shares of common stock, of the Company, for an aggregate purchase price of $1,500,000.
Current wording
Effective on April 5, 2024 (the “Initial Closing Date”), we agreed to definitive terms on a Securities Purchase Agreement dated April 4, 2024 (as amended from time to time, the “SPA”), with an institutional accredited investor (the “Purchaser”), pursuant to which the Company agreed to sell to the Purchaser, and the Purchaser agreed to purchase from the Company, 1,500 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) of the Company for $1,650,000, and warrants (the “Initial Warrants”), to purchase up to 3,300,000 shares of common stock, of the Company, for an aggregate purchase price of $1,500,000. On the Initial Closing Date, the Company sold the Purchaser 500 shares of Series B Preferred Stock (the “Initial Closing Shares”) and the Initial Warrants, for an aggregate of $500,000. The Initial Warrants have a term of five years.
Previous wording
The Warrants are exercisable on or after October 4, 2024, and for five years thereafter.
Current wording
On June 28, 2024 (the “Third Closing Date”), the Company sold the Purchaser 750 shares of Series B Preferred Stock (the “Third Closing Shares”) and (a) warrants to purchase up to 1,000,000 shares of common stock at an exercise price of $0.50 per share; and (b) warrants to purchase up to 500,000 shares of common stock at an exercise price of $1.00 per share (collectively, (a) and (b), the “Additional Warrants”, and together with the Initial Warrants, the “Warrants”, and the shares of common stock issuable upon exercise of the Warrants, the “Warrant Shares”). The Additional Warrants are exercisable on or after October 4, 2024, and for five years thereafter.
Previous wording
From (a) the Initial Closing Date until 30 days after the effective date of the registration statement registering for resale all of the Warrant Shares and shares of common stock issuable upon conversion of the Series B Preferred Stock which may be sold at the Initial Closing, Second Closing and Third Closing (and if such Option Closing has occurred as of such date, the Option Conversion Shares)(subject to certain cutback rights described in the Registration Rights Agreement), the Company is prohibited from (i) issuing, entering into any agreement to issue or announcing the issuance or proposed issuance of any shares of common stock, common stock equivalents, preferred stock or preferred stock equivalents or (ii) filing any registration statement or amendment or supplement thereto, other than the filing a registration statement on Form S-8 in connection with any employee benefit plan; and (b) from the Initial Closing Date until 180 days after the Initial Closing Date, the Company is prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock, common stock equivalents, preferred stock or preferred stock equivalents (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the SPA), except for an equity line of credit.
Current wording
From (a) the Initial Closing Date until 30 days after the effective date of the registration statement registering for resale all of the Warrant Shares and shares of common stock issuable upon conversion of the Series B Preferred Stock which may be sold at the Initial Closing, Second Closing, Third Closing and Fourth Closing, which registration statement has not yet been declared effective, the Company is prohibited from (i) issuing, entering into any agreement to issue or announcing the issuance or proposed issuance of any shares of common stock, common stock equivalents, preferred stock or preferred stock equivalents or (ii) filing any registration statement or amendment or supplement thereto, other than the filing a registration statement on Form S-8 in connection with any employee benefit plan; and (b) from the Initial Closing Date until 180 days after the Initial Closing Date, the Company is prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock, common stock equivalents, preferred stock or preferred stock equivalents (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the SPA), except for an equity line of credit.
Previous wording
The Company has reserved from its duly authorized capital stock 50,000,000 of shares of common stock issuable upon exercise of the Warrants and conversion of the Series B Preferred Stock.
Current wording
The Company has reserved from its duly authorized capital stock 50,000,000 shares of common stock issuable upon exercise of the Warrants and conversion of the Series B Preferred Stock.
Previous wording
In connection with the SPA, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchaser. Pursuant to the Registration Rights Agreement, the Company is required to file a resale registration statement (the “Registration Statement”) with the SEC to register for resale of the shares of the Company’s common stock issuable upon conversion of all shares of Series B Preferred Stock which may be sold at the Initial Closing, Second Closing and Third Closing (and if such Option Closing has occurred as of such date, the Option Conversion Shares), shares of common stock issuable in lieu of cash dividends which could accrue on the Series B Preferred Stock for a period of two years, and the Warrant Shares, within 30 days of the Closing Date, and to have such Registration Statement declared effective within 5 trading days after the date notified by the SEC that the SEC is not reviewing the Registration Statement, in the event the Registration Statement is not reviewed by the SEC, or 60 days of the Closing Date in the event the Registration Statement is reviewed by the SEC. The Company will be obligated to pay certain liquidated damages to the Purchaser if the Company fails to file the Registration Statement when required, fails to cause the Registration Statement to be declared effective by the SEC when required, of if the Company fails to maintain the effectiveness of the Registration Statement.
Current wording
In connection with the SPA, the Company entered into a registration rights agreement (as amended from time to time, the “Registration Rights Agreement”) with the Purchaser. Pursuant to the Registration Rights Agreement, the Company is required to file a resale registration statement (the “Registration Statement”) with the SEC to register for resale of the shares of the Company’s common stock issuable upon conversion of all shares of Series B Preferred Stock which may be sold at the Initial Closing, Second Closing, Third Closing and Fourth Closing, shares of common stock issuable in lieu of cash dividends which could accrue on the Series B Preferred Stock for a period of two years, and the Warrant Shares, within 30 days of the Closing Date, and to have such Registration Statement declared effective within 5 trading days after the date notified by the SEC that the SEC is not reviewing the Registration Statement, in the event the Registration Statement is not reviewed by the SEC, or 60 days of the Closing Date in the event the Registration Statement is reviewed by the SEC. The Company will be obligated to pay certain liquidated damages to the Purchaser if the Company fails to file the Registration Statement when required, fails to cause the Registration Statement to be declared effective by the SEC when required, of if the Company fails to maintain the effectiveness of the Registration Statement. Additionally, pursuant to the Amendment, within ten (10) calendar days of the execution and delivery of the Amendment, the Company was required to file a new registration statement on Form S-1 to provide for the registration of (a) 14,666,667 shares of common stock issuable in respect of the Series B Preferred Stock sold in each of the Second Closing, the Third Closing, and the Fourth Closing and (b) 1,500,000 shares of common stock issuable pursuant to the Additional Warrants.
Previous wording
The Series B Convertible Preferred Stock terms are describe in greater detail in the Current Report on Form 8-K filed by the Company with the SEC on April 11, 2024.
Current wording
The Series B Convertible Preferred Stock terms are described in greater detail in the Current Report on Form 8-K filed by the Company with the SEC on April 11, 2024. On June 27, 2024, with the approval of the Company and the sole shareholder of the Series B Preferred Stock, the Company amended the Series B Designation, to increase the floor price of the Series B Preferred Stock from $0.035 per share to $0.15 per share.
Previous wording
Upon filing and effectiveness of a Registration Statement on Form S-1 to register the Advance Shares (defined below) and provided other closing conditions are met, from time to time over the term of the ELOC, the Company shall have the right, but not the obligation, to direct the Purchaser to purchase shares of the Company’s common stock (the “Advance Shares”) in a maximum amount of one hundred percent (100%) of the average daily trading volume over the five trading days preceding the applicable advance date. At any time and from time to time during the 2-year term of the ELOC (the “Commitment Period”), the Company may deliver a notice to Purchaser (the “Advance Notice”) and shall deliver the Advance Shares to Purchaser via DWAC (as defined in the ELOC) on the next trading day. The purchase price (the “Purchase Price”) for the Advance Shares shall equal 90.0% of the gross proceeds received by the Purchaser for the resale of the Advance Shares during the three consecutive trading days immediately following the date an Advance Notice is delivered (the “Valuation Period”). The closing of an Advance Notice shall occur within two trading days following the end of the respective Valuation Period, whereby the Purchaser shall deliver the Investment Amount (as defined below) to the Company by wire transfer of immediately available funds. The Company shall not deliver another Advance Notice to Purchaser within one trading day of a prior closing of Advance Shares. The “Investment Amount” means the aggregate Purchase Price for the Advance Shares purchased by the Purchaser, minus clearing costs payable to the Purchaser’s broker or to the Company’s transfer agent for the issuance of the Advance Shares.
Current wording
Upon filing and effectiveness of a Registration Statement on Form S-1 to register the Advance Shares (defined below), which was declared effective on May 9, 2024, and provided other closing conditions are met, from time to time over the term of the ELOC, the Company has the right, but not the obligation, to direct the Purchaser to purchase shares of the Company’s common stock (the “Advance Shares”) in a maximum amount of one hundred percent (100%) of the average daily trading volume over the five trading days preceding the applicable advance date. At any time and from time to time during the 2-year term of the ELOC (the “Commitment Period”), the Company may deliver a notice to Purchaser (the “Advance Notice”) and shall deliver the Advance Shares to Purchaser via DWAC (as defined in the ELOC) on the next trading day. The purchase price (the “Purchase Price”) for the Advance Shares shall equal 90.0% of the gross proceeds received by the Purchaser for the resale of the Advance Shares during the three consecutive trading days immediately following the date an Advance Notice is delivered (the “Valuation Period”). The closing of an Advance Notice shall occur within two trading days following the end of the respective Valuation Period, whereby the Purchaser shall deliver the Investment Amount (as defined below) to the Company by wire transfer of immediately available funds. The Company shall not deliver another Advance Notice to Purchaser within one trading day of a prior closing of Advance Shares. The “Investment Amount” means the aggregate Purchase Price for the Advance Shares purchased by the Purchaser, minus clearing costs payable to the Purchaser’s broker or to the Company’s transfer agent for the issuance of the Advance Shares.
Previous wording
The right of the Company to issue and sell the Advance Shares to the Purchaser is subject to the satisfaction of certain closing conditions, including, but not limited to, (i) a Registration Statement on Form S-1 registering for resale by the Purchaser of the Advance Shares and Commitment Shares being declared effective by the SEC, (ii) accuracy of the Company’s representations and warranties, (iii) the Company’s performance under the ELOC in all material respects, (iv) no suspension of trading or delisting of common stock, (v) the limitation of the Purchaser’s beneficial ownership of the Company’s common stock to no more than 4.99% of the Company’s then outstanding common stock, (vi) the Company maintaining its DWAC-eligible status, (vii) the Company maintaining a sufficient share reserve, and (viii) the closing price of the Company’s common stock on the date the Advance Notice is received must exceed $0.15.
Current wording
The right of the Company to issue and sell the Advance Shares to the Purchaser is subject to the satisfaction of certain closing conditions, including, but not limited to, (i) a Registration Statement on Form S-1 registering for resale by the Purchaser of the Advance Shares and Commitment Shares being declared effective by the SEC, which has occurred to date, (ii) accuracy of the Company’s representations and warranties, (iii) the Company’s performance under the ELOC in all material respects, (iv) no suspension of trading or delisting of common stock, (v) the limitation of the Purchaser’s beneficial ownership of the Company’s common stock to no more than 4.99% of the Company’s then outstanding common stock, (vi) the Company maintaining its DWAC-eligible status, (vii) the Company maintaining a sufficient share reserve, and (viii) the closing price of the Company’s common stock on the date the Advance Notice is received must exceed $0.15.To date, the Company has sold a total of 950,000 shares for a gross proceeds of $457,655 before fees, discounts and expenses.
Previous wording
In connection with the ELOC, the Company entered into the ELOC RRA with the Purchaser. Pursuant to the ELOC RRA, the Company is required to file a resale registration statement (the “ELOC Registration Statement”) with the SEC to register all common stock underlying the Advance Shares, and the Commitment Shares, within 30 days of the Closing Date, and to have such ELOC Registration Statement declared effective within 5 trading days after the date notified by the SEC that the SEC is not reviewing the ELOC Registration Statement, in the event the Registration Statement is not reviewed by the SEC, or 60 days of the Closing Date in the event the ELOC Registration Statement is reviewed by the SEC. The Company will be obligated to pay certain liquidated damages to the Purchaser if the Company fails to file the ELOC Registration Statement when required, fails to cause the ELOC Registration Statement to be declared effective by the SEC when required, of if the Company fails to maintain the effectiveness of the ELOC Registration Statement.
Current wording
In connection with the ELOC, the Company entered into the ELOC RRA with the Purchaser. Pursuant to the ELOC RRA, the Company was required to file a resale registration statement (the “ELOC Registration Statement”) with the SEC to register all common stock underlying the Advance Shares, and the Commitment Shares, which was declared effective on May 9, 2024.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
We had a net loss of $2,390,979 and $2,284,025 for the quarters ended June 30, 2024 and 2023, respectively, representing an increase in net loss of $106,954 or 4.7% from the prior period, for the reasons discussed above.
Current report — wording carried from elsewhere
We began generating revenues in November 2022 and had revenues of $377,258 and $241,959 for the six months ended June 30, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
The Company analyzed the following factors when determining the amounts to be paid to Epiq Scripts under the Master Services Agreement and related statement of work: a) the fairness of the terms for the Company (including fairness from a financial point of view); b) the materiality of the transaction; c) bids / terms for a similar transaction from unrelated parties; d) the structure of the transaction; and e) the interests of each related party in the transaction.
Current report — wording carried from elsewhere
We had gross profit of $217,190 and $144,329 for the six months ended June 30, 2024 and 2023, respectively. The related party cost of revenues was associated with a Master Services Agreement entered into with Epiq Scripts and a related statement of work and the remaining cost of revenues was attributed to the amounts paid to our unrelated party doctors network and shipping expenses.
Current report — wording carried from elsewhere
The decrease in general administration expenses for the six months ended June 30, 2024, compared to the prior period, was due primarily to reduced cost related to our legal fees of $287,415 and $198,386 for the six months ended June 30, 2024 and 2023, respectively, mainly related to legal fees in connection with our follow-on offering, preferred offering and related matters. Placement agent fees of $12,600 and $400,000, for the six months ended June 30, 2024 and 2023, respectively, relating to fees paid to our placement agent in connection with our private placement and initial public offerings. Accounting and auditing fees of $66,083 and $77,600, for the six months ended June 30, 2024 and 2023, respectively, which was in connection with fees paid to our accountants and auditors in connection with the preparation and reviews of our financial statements included in our quarterly reports and the audit of our financial report included in our annual report. General consulting related expenses of $220,309 and $219,141, for the six months ended June 30, 2024 and 2023, respectively, related to other various consulting fees paid in connection with our operations in the current period. Software development fees of $411,381 and $291,260 for the six months ended June 30, 2024 and 2023, respectively, related to the front and backend development of our website in the current period. Software development expenses are integral to customers accessing our ordering system and successfully placing an order for our products. We had loss on sale of assets of $18,387 for the six months ended June 30, 2024, compared to $0 for the six months ended June 30, 2023. On May 15, 2024, the Company disposed of $119,819 of equipment to Epic Scripts, a related party, in an arm’s length transaction. The equipment was sold for $65,000, realizing a loss on sale of assets of $18,837.
Current report — wording carried from elsewhere
We had $183,000 of investor relations expenses for the six months ended June 30, 2024, related to awareness of our stock to the public market, compared to $519,465 of investor relations expenses for the six months ended June 30, 2023.
Current report — wording carried from elsewhere
Stock-based compensation totaled $1,313,845 and $1,215,542 (including a total of $416,340 and $700,000 attributed to stock issued for services and $37,965 and $64,271 attributed to stock-based compensation from issuances of options and warrants), for the six months ended June 30, 2024 and 2023, respectively, which increase was due to which increase was mainly due to bonuses issued to certain officers, directors and employees for services rendered.
Current report — wording carried from elsewhere
We had imputed interest expense of $0 and $6,473 (which represented imputed interest on the related party loans which were repaid in 2023, as discussed below under “Liquidity and Capital Resources”) for the six months ended June 30, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
Cash decreased mainly due to funds used for general operating expenses.
Current report — wording carried from elsewhere
On April 1, 2024, the Company borrowed $100,000 from Cohen Enterprises, which is owned and controlled by Jacob D. Cohen, the Company’s Chief Executive Officer and Chairman of the Board of Directors. The amount borrowed is payable on demand and does not accrue interest.