As filed with the Securities and Exchange Commission
on May 30, 2025
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Mangoceuticals, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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8099 |
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87-3841292 |
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(State or other jurisdiction of
incorporation or organization) |
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(Primary Standard Industrial
Classification Code Number) |
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(I.R.S. Employer
Identification Number) |
15110 N. Dallas Parkway, Suite 600
Dallas, Texas 75248
(214) 242-9619
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive office)
Jacob D. Cohen
Chief Executive Officer
Mangoceuticals, Inc.
15110 N. Dallas Parkway, Suite 600
Dallas, Texas 75248
(214) 242-9619
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Joseph M. Lucosky, Esq.
Steven Lipstein, Esq.
Lucosky Brookman LLP
101 Wood Avenue South, 5th Floor
Woodbridge, NJ 08830
(732) 395-4400
Approximate date of commencement of proposed
sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ |
Accelerated filer ☐ |
| Non-accelerated filer ☒ |
Smaller reporting company ☒ |
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Emerging growth company ☒ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to
such Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
| PROSPECTUS |
SUBJECT TO COMPLETION, DATED MAY 30, 2025 |
Mangoceuticals, Inc.
4,461,718 Shares of Common Stock
We
are registering (a) already issued shares of common stock to permit the resale of these shares of common stock by the holders of the common
stock from time to time after the date of this prospectus and (b) shares of common stock to be issued to permit the resale of these shares
of common stock, after they are issued, by the holders of the common stock from time to time after the date of this prospectus. We will
not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. Any proceeds received by the
Company from the exercise of common stock purchase warrants will be used for general working capital.
The
selling stockholders named in this prospectus may offer and sell, from time to time, in one or more offerings, up to an aggregate of 4,461,718 shares
of common stock, par value $0.0001 per share (the “Common Stock”) consisting of: (i) 1,960,709 shares of Common Stock
issuable upon exercise of warrants (with 1,650,000 at an exercise price of $1.50 per share; 275,482 at an exercise price of $1.815
per share, and; 35,227 at an exercise price of $3.00 per share (the “Warrants”)), (ii) 476,667 shares of Common Stock
issuable upon conversion of 650 shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock”) with
each share having a stated value of $1,100 and having a conversion price of $1.50 per share; (iii) 393,333 shares of Common Stock
issuable upon conversion of the $500,000 Amended and Restated Convertible Promissory Note dated May 27, 2025 with an effective date
as of April 15, 2025 with a fixed conversion price of $1.50 per share (the “Note”); and (iv) 1,631,009 already issued
shares of Common Stock comprised of (a) 550,000 shares of Common Stock issued upon conversion of 750 shares of Series B Preferred
Stock; (b) 376,009 shares of Common Stock issued to certain institutional accredited investors (with 70,000 shares purchased at a
price per share of $1.50; 70,454 shares purchased at a price per share of $1.65; 155,555 shares purchased at a price per share of
$2.25; and 80,000 shares purchased at a price per share of $2.50); (c) 100,000 shares of Common Stock issued upon conversion of a
$150,000 convertible promissory note dated December 13, 2024 and converted into shares of Common Stock on January 15, 2025 at a
price per share of $1.50; and (d) 605,000 shares of Common Stock beneficially owned by Jacob Cohen, our Chairman and Chief Executive
Officer.
We
will receive proceeds from any exercise of the Warrants, however, there is no guarantee that any Warrants will be exercised. The shares
of Common Stock may be sold publicly or through private transactions by the selling stockholders at prevailing market prices or at negotiated
prices at the times of sale. The shares of Common Stock may be offered by the selling stockholders to or through underwriters, dealers
or other agents, directly to investors or through any other manner permitted by law, on a continued or delayed basis. We provide more
information about how the selling stockholders may sell or otherwise dispose of the shares of Common Stock in the section entitled “Plan
of Distribution” beginning on page 148 of this prospectus.
We
are not selling any shares of Common Stock in this offering, and we will not receive any proceeds from the sale of shares by the selling
stockholders. The registration of the securities covered by this prospectus does not necessarily mean that any of these securities will
be offered or sold by the selling stockholders. The timing and amount of any sale is within the respective selling stockholders’
sole discretion, subject to certain restrictions. To the extent that any selling stockholder resells any securities, the selling stockholder
may be required to provide you with this prospectus identifying and containing specific information about the selling stockholder and
the terms of the securities being offered.
To
the extent required by the U.S. Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations thereunder, the selling stockholders and any broker-dealer
participating in the distribution of the shares of Common Stock may be deemed to be “underwriters” within the meaning of
the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act.
Our
Common Stock is listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “MGRX”. On May 27, 2025,
the last sale price per share of the Common Stock as reported on Nasdaq was $1.89.
We
are an “emerging growth company” as defined in the federal securities laws and, as a result, have elected to comply with certain
reduced public company disclosure and reporting requirements.
Investing
in our common stock involves risks that are described in the “Risk Factors” section in any other annual, periodic or current
report.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is May [ ], 2025
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”), using
a “shelf” registration process. Under this shelf registration process, the selling stockholders may, from time to time, offer
and sell shares of common stock offered under this prospectus. We will not receive any proceeds from the sale by the selling stockholders
of the common stock offered by them described in this prospectus.
We
and the selling stockholders have not authorized anyone to provide any information or make any representations other than those contained
in this prospectus. We and the selling stockholders take no responsibility for, and can provide no assurance as to the reliability of,
any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only under
circumstances and in jurisdictions where it is lawful to do so. No dealer, salesperson, or other person is authorized to give any information
or to represent anything not contained in this prospectus. This prospectus is not an offer to sell securities, and it is not soliciting
an offer to buy securities, in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is current
only as of its date. Our business, financial condition, results of operations, and prospects may have changed since its date.
This
prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the
actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some
of the documents referred to herein have been filed or will be filed as exhibits to the registration statement of which this prospectus
is a part, and you may obtain copies of those documents as described in the section entitled “Where You Can Find More Information.”
The
selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and
sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus regardless of the
time of delivery of this prospectus or of any sale of common stock. Neither the delivery of this prospectus, nor any sale made hereunder,
will under any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information
contained herein is correct as of any time subsequent to the date of such information.
For
investors outside the United States: Neither we nor the selling stockholders have done anything that would permit this offering or possession
or distribution of this prospectus in connection with this offering in any jurisdiction, other than the United States, where action for
that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about,
and observe any restrictions relating to, the offering of our common stock and the distribution of this prospectus outside the United
States and in their jurisdiction.
Unless
otherwise indicated or the context otherwise requires, all references in this prospectus to “Mangoceuticals” or the “Company,”
“we,” “our,” “ours,” “us” or similar terms refer to Mangoceuticals, Inc., together with
its consolidated subsidiaries.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this prospectus
can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,”
“should,” “plan,” “intend,” “may,” “predict,” “continue,” “estimate,”
and “potential,” or the negative of these terms or other similar expressions.
Forward-looking
statements appear in a number of places in this prospectus and include, but are not limited to, statements regarding our intent, beliefs
or current expectations. These forward-looking statements include information about possible or assumed future results of our business,
financial condition, results of operations, liquidity, plans, and objectives. Forward-looking statements are based on our management’s
beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties,
and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including,
but not limited to, those identified described in the section “Risk Factors” in any other annual, periodic, or current report.
The statements we make regarding the following matters are forward-looking by their nature:
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our ability to obtain additional funding, the terms of such funding, and dilution caused thereby; |
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the effect of pandemics on our operations, sales, and the market for our products; |
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our ability to build and maintain our brand; |
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cybersecurity, information systems and fraud risks and problems with our websites; |
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our ability to expand and grow our operations, and successfully market our products; |
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changes in, and our compliance with, rules and regulations affecting our operations, sales, and/or our products; |
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shipping, production or manufacturing delays; |
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our ability to increase sales; |
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regulations we are required to comply with in connection with our operations, manufacturing, labeling and shipping; |
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competition from existing competitors or new competitors or products that may emerge; |
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our dependency on third-parties to prescribe and compound our erectile dysfunction (ED) product; |
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our ability to establish or maintain relations and/or relationships with third-parties; |
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potential safety risks associated with our Mango ED and Mango GROW products, including the use of ingredients, combination of such ingredients and the dosages thereof; |
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the effects of high inflation, increasing interest rates and economic downturns, including potential recessions, as well as macroeconomic, geopolitical, health and industry trends, pandemics, acts of war (including the ongoing Ukraine/Russian conflict and ongoing conflict in and around Israel) and other large-scale crises; |
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our ability to protect intellectual property rights; |
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our ability to adequately support future growth; |
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our ability to attract and retain key personnel to manage our business effectively; and |
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other risk factors included under “Risk Factors” below. |
Further
information on risks, uncertainties, and other factors that could affect our financial results are included in our filings with the Securities
and Exchange Commission (the “SEC”) from time to time, including in the section entitled “Risk Factors” in any
other annual, periodic or current report. You should not rely on these forward-looking statements, as actual outcomes and results may
differ materially from those expressed or implied in the forward-looking statements as a result of such risks and uncertainties. All forward-looking
statements in this prospectus are based on management’s beliefs and assumptions and on information currently available to us, and
we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist
after the date on which they were made.
PROSPECTUS SUMMARY
This
summary highlights certain information contained elsewhere in this prospectus. This summary is not complete and does not contain all
the information that may be important to you. We urge you to read this entire prospectus carefully, including the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our
consolidated financial statements and notes thereto incorporated by reference herein, before making an investment decision. Some
of the statements made in this prospectus discuss future events and developments, including our future strategy and our ability to generate
revenue, income and cash flow. These forward-looking statements involve risks and uncertainties which could cause actual results to differ
materially from those contemplated in these forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements”.
Company Overview
We connect consumers to licensed
healthcare professionals through our website at www.MangoRX.com, for the provision of care via telehealth on our customer portal.
We also focus on developing, marketing, and selling a variety of men’s wellness products and services via a telemedicine platform.
To date, the Company has identified men’s wellness telemedicine services and products as a growing sector in the most recent years
and especially related to the areas of erectile dysfunction (“ED”), hair loss, testosterone replacement or enhancement
therapies, and weight management treatments. In this regard, we have developed and are commercially marketing a brand of ED products under
the brand name “Mango,” a brand of hair loss products under the brand name “Grow,” a brand of hormone
balance and therapy products under the name “Mojo,” and a brand of weight loss products under the brand name “Slim”
(Mango, Grow, Mojo, and Slim are collectively referred to as the “Compounded Products”).
The Company is also marketing
and selling an U.S. Food and Drug Administration (“FDA”) approved form of oral testosterone undecanoate to treat low
testosterone in men and as a form of Testosterone Replacement Therapy (TRT), developed and produced by Marius Pharmaceuticals, Inc. under
the brand name “Prime” powered by Kyzatrex® (“Prime”) (Prime and our Compounded Products collectively
referred to as the “Pharmaceutical Products”). 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.
The Company, through the patent
portfolio acquired as part of the Intramont IP Purchase Agreement (as further described below), is in the process of conducting Phase
II clinical trials and efficacy studies to determine the effectiveness of its patented respiratory illness prevention technology against
the likes of the influenza A virus (H1N1) and avian influenza (H5N1). The studies are anticipated to be completed in the 2nd
quarter of 2025 which will then determine the Company’s next steps in its commercialization and monetization efforts.
The Company, through its Master
Distribution Agreement with Propre Energie, Inc. (“Propre”)(as further described below) intends to license certain intellectual
property and patent rights from Propre relating to clinically proven, plant-based formulations targeting hyperpigmentation, dark spots,
uneven skin tone, and skin brightening through advanced solutions marketed under the brand Dermytol® (“Dermytol”). The
Company is in the process of preparing its marketing and distribution strategy for Dermytol and intends to commence operations under this
agreement in the 3rd quarter of 2025.
All Compounded Products are
produced at and fulfilled by Epiq Scripts, LLC (“Epiq Scripts”), a related party compounding pharmacy, and are available
to patients on the determination of a prescribing physician that the compounded drug is necessary for the individual patient. The Company
also uses Epiq Scripts to fulfill all patient orders of Prime (as further discussed below). Epiq Scripts is currently 52% owned by Mr. Jacob D. Cohen, our Chairman and Chief Executive Officer.
Our Products
Mango ED
This product currently includes
the following three ingredients: Either Sildenafil (the active ingredient in Viagra) or Tadalafil (the active ingredient in Cialis), and
Oxytocin, all of which are used in FDA approved drugs, as well as L-Arginine, an amino acid that is available as a dietary supplement.
We currently offer two dosage
levels of our Mango ED product and anticipate doctors prescribing a dosage based on the needs and medical history of the patient. Our
Mango ED product currently includes the following amounts of the three ingredients: (1) either Sildenafil (50 milligrams (mg)) or Tadalafil
(10 (mg)), Oxytocin (100 International units (IU)) and L-Arginine (50mg); and (2) either Sildenafil (100 milligrams (mg)) or Tadalafil
(20mg), Oxytocin (100IU) and L-Arginine (50mg).
Our Mango ED product has not
been, and will not be, approved by the FDA and instead we produce and sell our products, including our Mango ED product, under an exemption
provided by Section 503A of the Federal Food, Drug and Cosmetic Act (“FFDCA Act”), as discussed below. Additionally, because
our Mango ED product is being specially compounded for the customer by a pharmacist with a physician’s prescription and because
the ingredients for our Mango ED product are publicly disclosed, this product formula can be replicated by other companies. We are not
aware of any clinical studies involving (i) administration of Tadalafil or Sildenafil sublingually at the doses we provide patients, or
(ii) compounding of Tadalafil or Sildenafil, Oxytocin, and L-arginine to treat ED, similar to our Mango ED products. We are, however,
aware of other companies that are currently selling oral disintegrating tablets for ED, including those using a combination of Tadalafil
(the active ingredient in Cialis) and Sildenafil (the active ingredient in Viagra). We believe that the potential safety risks associated
with our Mango ED products are comparable to the safety risks associated with oral formulations of Tadalafil and Sildenafil approved by
the FDA for the treatment of ED. We do not expect significant safety risks associated with L-arginine, as the FDA has recognized in its
regulations that L-arginine may be safely added as a nutrient to foods. Clinical studies of intranasal Oxytocin have also found that Oxytocin
is generally safe and well-tolerated.
Mango
Hair Growth Product - ‘GROW’ by MangoRx
Mango GROW currently includes
the following four ingredients - (1) Minoxidil (the active ingredient in Rogaine®) and (2) Finasteride (the active ingredient in Propecia),
each of which is used in FDA approved drugs, as well as (3) Vitamin D3 and (4) Biotin, which are available as dietary supplements. However,
the fact that Minoxidil and Finasteride are used in FDA approved drugs, and that Vitamin D3 and Biotin, are available as a dietary supplement,
does not mean that these ingredients will prove safe when combined into a single formulation to attempt to treat hair growth. Mango GROW
is encapsulated in convenient chewable, mint-flavored rapid dissolve tablets (“RDT”).
We currently offer one dosage
level of our Mango GROW product and anticipate doctors prescribing Mango GROW based on the needs and medical history of the patient. Our
Mango GROW product currently includes the following amounts of the four ingredients: (1) Minoxidil (2.5mg), (2) Finasteride (1mg), (3)
Vitamin D3 (2000IU) and (4) Biotin (1mg). Our Mango GROW product has not been, and will not be, approved by the FDA and instead we produce
and sell our Mango GROW product and plan to produce and sell future pharmaceutical products, under an exemption provided by Section 503A
of the Federal Food, Drug, and Cosmetic Act.
We are not aware of any clinical
studies involving the administration of Minoxidil and Finasteride sublingually at the dose we provide patients, or the compounding of
Minoxidil, Finasteride, Vitamin D3 and Biotin to treat hair growth. We are, however, aware of other companies that are currently selling
oral tablets for hair growth, including those using a combination of Minoxidil and Finasteride. Additionally, because our Mango GROW product
is being specially compounded for the customer by a pharmacist with a physician’s prescription and because the ingredients for our
Mango GROW product are publicly disclosed, this product formula can be replicated by other companies.
SLIM by MangoRx
SLIM currently includes the
following two ingredients - (1) Vitamin B6, which is available as dietary supplement, and (2) Semaglutide, the active ingredient used
in an FDA approved drug. However, the fact that Semaglutide is used in an FDA approved drug, and that Vitamin B6 is available as a dietary
supplement, does not mean that these ingredients will prove safe when combined into a single formulation to attempt to assist with weight
loss or weight management. SLIM is encapsulated in convenient chewable, mint-flavored RDT.
We currently offer four dosage
levels of our SLIM product and anticipate doctors prescribing SLIM based on their needs and medical history of the patient. Our SLIM product
currently includes the (1) Vitamin B6 (10mg), and (2) Semaglutide, in either 0.5mg, 1.0mg, 1.5mg or 2.0mg variations, which amount is
based on the prescribing practitioner. Our SLIM product has not been, and will not be, approved by the FDA and instead we produce and
sell our SLIM product and plan to produce and sell future pharmaceutical products, under an exemption provided by Section 503A of the
FFDCA Act.
We are not aware of any clinical
studies involving the administration of Semaglutide as a RDT at the dose we provide patients, or the compounding of Semaglutide and Vitamin
B6, to treat weight loss or weight management, as is contemplated by our SLIM product.
MOJO by MangoRx
This product is produced at
our related party compounding pharmacy and is available to patients on the determination of a prescribing physician that the compounded
drug is necessary for the individual patient. MOJO currently includes the following three ingredients - (1) Dehydroepiandrosterone (“DHEA”),
which is available as dietary supplement, (2) Pregnenolone, which is available as a dietary supplement, and (3) Enclomiphene Citrate,
one of the active ingredients in Clomid and is used in an FDA approved drug. However, the fact that Enclomiphene Citrate is used in an
FDA approved drug, and that DHEA and Pregnenolone are available as a dietary supplement, does not mean that these ingredients will prove
safe when combined into a single formulation to attempt to treat hormone imbalances. MOJO is encapsulated in convenient chewable, mango-flavored
RDT.
We currently offer one dosage
level of our MOJO product and anticipate doctors prescribing MOJO based on their needs and medical history of the patient. Our MOJO product
currently includes the following amounts of the three ingredients: (1) DHEA (10mg), (2) Pregnenolone (5mg) and (3) Enclomiphene Citrate
(25mg).
We are not aware of any clinical studies involving
the administration of Enclomiphene as a RDT at the dose we provide patients, or the compounding of DHEA, Enclomiphene, and/or Pregnenolone,
to treat hormone imbalances, as is contemplated by our MOJO product.
Additional Information
Regarding our Compounded Products
Because our Compounded Products
have not been, and will not be, approved by the FDA, our products have not had the benefit of the FDA’s clinical trial protocol
which seeks to prevent the possibility of serious patient injury and death. If this were to occur, we could be subject to litigation and
governmental action, which could result in costly litigation, significant fines, judgments or penalties.
We currently anticipate using
funding we may raise in the near term to finance marketing and general operational expenses associated with the sale of our Pharmaceutical
Products. We launched our website in mid-November 2022.
Our Compounded Products have
been formulated as rapid dissolving tablets (RDT) using a sublingual (applied under the tongue) delivery system to bypass the stomach
and liver. It is a generally established principle that sublingual drug absorption through the oral mucosa is generally faster than drug
absorption through the gastrointestinal tract. This is because sublingual drugs that are absorbed through the oral mucosa directly enter
the systemic circulation, bypassing the gastrointestinal tract and first-pass metabolism in the liver (see H. Zhang et al., Oral mucosal
drug delivery: clinical pharmacokinetics and therapeutic applications, 41 Clin Pharmacokinet
661, 662 (2002). Though the active ingredients that comprise our Mango ED product are meant to treat ED - an issue that according
to a 2018 study published in The Journal of Sexual Medicine has been estimated to affect over one-third of today’s men’s
population (with prevalence increasing with age) - we are also aiming to brand ourselves as a lifestyle company marketed to men seeking
enhanced sexual vitality, performance, and overall mood and confidence.
PRIME’ by MangoRx,
Powered by Kyzatrex® - ‘PRIME’, by MangoRx, powered by Kyzatrex®, a FDA-approved oral Testosterone Replacement
Therapy (TRT) product, available by prescription, that is used to treat adult men who have low or no testosterone levels due to certain
medical conditions. ‘PRIME’, by MangoRx, powered by Kyzatrex® is one of only three FDA approved TRT treatments that is
delivered orally-as opposed to the traditional, invasive, and inconvenient injection-based drug delivery protocol. ‘PRIME’,
by MangoRx, powered by Kyzatrex® delivers testosterone in a softgel capsule that is absorbed primarily via the lymphatic system, avoiding
liver toxicity. The benefits of ‘PRIME,’ powered by Kyzatrex®, over traditional injectable TRTs include enhanced vitality,
improved mood, sharper cognition, optimized physical performance, and balanced hormonal levels at 96% efficacy by day 90, as demonstrated
in Phase 3 clinical research by Marius Pharmaceuticals. With ‘PRIME,’ MangoRx is working to expand broad-based consumer access
to this therapy.
Our Contracted Telehealth Providers
In many states, including
Texas where our principal business office is located, the corporate practice of medicine doctrine prohibits corporations from practicing
medicine and from employing physicians to provide professional medical services. Many states that recognize this doctrine also prohibit
physicians from agreeing to share the fees they receive for professional services with unlicensed entities or individuals, a practice
that is commonly known as “fee splitting.” The requirements for compliance with any applicable corporate practice of
medicine and fee splitting restrictions vary among the states. In Texas, for example, there is no statute that expressly prohibits fee
splitting, but the corporate practice of medicine doctrine has been interpreted to prohibit physicians from ceding control over their
fee structures to corporate entities or giving a substantial portion of the fees received to corporate entities.
In order to comply with corporate
practice of medicine and fee splitting restrictions, we do not employ or directly contract with individual physicians or physician groups,
nor do we control their medical decision-making or charges. Rather, the Company has entered into a variety of physician services agreements
(the “Physicians Agreements”) with BrighterMD, LLC doing business as Doctegrity (“Doctegrity”),
LocumTele, and Locum Tenens USA (collectively, the “Telemedicine Providers”), all of which counterparties have agreed
to make available to us, healthcare professionals, to allow them to provide clinical services directly to our future customers via telehealth.
We have integrated these healthcare professionals to allow for telehealth consultations and related services on our Mangoceuticals platform
which has been developed and is complete. This platform is the backbone of our business as it connects consumers with both the medical
provider and the pharmacy for fulfillment. It is also the system that we will use to create marketing funnels for outgoing marketing,
customer management and support, and analytics for future sales.
Through our Physician Agreements,
the healthcare professionals are responsible for the practice of medicine and control of the clinical decision-making.
After a patient visits our
website and submits a request for a consultation with a health care professional, our Telemedicine Providers communicate the patient’s
information to one of their affiliated physicians. The Telemedicine Providers and their physicians are responsible for conducting the
telehealth consultation and any ongoing communication with the patient in accordance with applicable laws. The physicians make a determination,
in their sole discretion, as to whether or not to prescribe our Pharmaceutical Products to potential customers. If the physicians prescribe
our Pharmaceutical Products, then the customers pay us for our products. In turn, Epiq Scripts, LLC, pursuant to the Master Services Agreement
discussed below, is provided information on the customer and compounding of our product, compound the product, and ship the product to
customers using packaging and shipping materials which we supply.
We pay the Telemedicine Providers
for each physician visit conducted in response to request made by a patient on our website, regardless of whether the physician prescribes
our product to the patient. The fee we pay the Telemedicine Providers is fixed, set in advance and is negotiated at arms’ length
after comparing the prices offered by similar services. We are not a party to any contracts between the Telemedicine Providers and any
health professionals or physician groups and do not control how the Telemedicine Providers reimburse these providers.
Although our arrangement with
the Telemedicine Providers, as summarized above, is structured to comply with applicable laws, including those restricting the corporate
practice of medicine and fee splitting, there may be a risk that a state agency, now or in the future as these laws (and interpretations
of them) evolve, would conclude that the arrangement and fee structure between the Telemedicine Providers and their contracted physicians
and/or our agreements with the Telemedicine Providers violate the corporate practice of medicine doctrine and fee splitting restrictions
in Texas or in another state where a patient who uses our Mangoceuticals platform is located.
The Telemedicine Providers’
physicians are tasked with determining whether patients seeking our Pharmaceutical Products are eligible to be prescribed our Pharmaceutical
Products, with the sole purpose of the telemedicine engagement being for the determination, in the physician’s sole judgment, of
whether the patient is qualified to obtain a prescription for the Pharmaceutical Products. The Telemedicine Providers’ physicians
are required to electronically send prescriptions to Epiq Scripts (the Company’s designated and accredited pharmacy partner), which
financial relationship is required to be disclosed in writing to the patient via the Terms and Conditions listed on the Company’s
website, including informed consent, and also informing the patient that the prescription is sent to the Company’s designated pharmacy
partner. The Telemedicine Providers’ physicians are only able to prescribe our Pharmaceutical Products to patients seeking help
for the treatment which the specific product provides (for example, Mango ED for treatment for ED and GROW for treatment hair loss) through
our customer portal.
Our Related Party Pharmacy
As discussed in greater detail
below under “-Material Agreements-Master Services Agreement with Epiq Scripts” we have entered into an exclusive Master
Services Agreement and statement of work with Epiq Scripts, LLC, for its specialty compounding and packaging capabilities, fulfillment,
and distribution of certain prescription products available through our platform. These prescription products include our Pharmaceutical
Products. Epiq Scripts is a related party because it was 51%-owned by American International Holdings Corp (“American International”)
at the time of our entry into the Master Services Agreement and is currently 52% owned by Mr. Jacob D. Cohen, our Chairman and Chief Executive
Officer. Mr. Cohen, our Chairman and Chief Executive Officer, also served as the Chief Executive Officer and a director of, and had voting
control over, American International at the time of the entry into the Master Services Agreement. Our company was previously wholly-owned
by American International until April 16, 2022, when control of our company was sold to Cohen Enterprises, Inc., which entity is owned
by Jacob D. Cohen, the Chairman and Chief Executive Officer of the Company (“Cohen Enterprises”). Epiq Scripts was
formed in January 2022 and only began compounding drugs for patients in November 2022. On February 15, 2023, the 51% of Epiq Scripts then
owned by American International was transferred to Mr. Cohen as part of an exchange transaction, whereby Mr. Cohen agreed to cancel his
preferred stock of American International, which provided him voting control over American International, in exchange for among other
assets, American International’s ownership of Epiq Scripts. Epiq Scripts is currently 52% owned by Mr. Cohen, our Chairman and Chief
Executive Officer. Additionally, Mr. Cohen has served as the co-Manager of Epiq Scripts since January 2022.
Epiq Scripts is currently
fully licensed with the Texas State Board of Pharmacy (“TSBP”) and further has State Board of Pharmacy (or its equivalent)
licenses from the District of Columbia and all other states except for Alabama (Epiq Scripts intends to obtain a state license from Alabama
by the end of the second quarter of 2025). Epiq Scripts has obtained its National Provider Identifier
(“NPI”) number and is now a member of the National Council for Prescription Drug Programs (“NCPDP”),
a standards development organization. Additionally, Epiq Scripts has applied for the highest level of accreditation with the Utilization
Review Accreditation Commission (“URAC”), a Washington DC-based healthcare accrediting
organization that establishes quality standards for the entire healthcare industry. Although Epiq Scripts is physically located
in Texas, it can ship products to customers in all states (except Alabama).
Master Services Agreement
with Epiq Scripts
On September 1, 2022, and
effective on August 30, 2022, we entered into a Master Services Agreement (the “MSA”) with Epiq Scripts, LLC (“Epiq
Scripts”), which at the time was 51%-owned by American International Holdings Corp (“American International”). Mr. Cohen,
our Chairman and Chief Executive Officer, served as the Chief Executive Officer and a director of, and had voting control over, American
International at the time of the entry into the Master Services Agreement. As discussed under “Company Information and Formation,”
our company was wholly-owned by American International until April 16, 2022, when control of our company was sold to Cohen Enterprises,
Inc. (“Cohen Enterprises”), which is owned by Mr. Cohen. Epiq Scripts was formed in January 2022, and only began compounding
drugs for patients in November 2022. On February 15, 2023, the 51% of Epiq Scripts then owned by American International was transferred
to Mr. Cohen as part of an exchange transaction, whereby Mr. Cohen agreed to cancel his preferred stock of American International, which
provided him voting control over American International, in exchange for among other assets, American International’s ownership
of Epiq Scripts. As a result, Epiq Scripts is currently 51% owned by Mr. Cohen, our Chairman and Chief Executive Officer. Additionally,
Mr. Cohen has served as the co-Manager of Epiq Scripts since January 2022.
Pursuant to the Master Services
Agreement and a related statement of work (“SOW”), Epiq Scripts agreed to provide pharmacy and related services to us, we
agreed to exclusively use Epiq Scripts as the provider of the Services (defined below) during the term of the agreement, so long as Epiq
Scripts complies with the terms of the Master Services Agreement. The agreement also includes a 30-day right of first refusal for Epiq
Scripts to provide pharmacy services for any new product that Mango may introduce during the term of the agreement.
Pursuant to the SOW, Epiq
Scripts agreed to provide for the online fulfillment, specialty compounding, packaging, shipping, dispensing and distribution (collectively,
the “Services”) of products sold exclusively via our website that may be prescribed as part of a telehealth consultation on
our platform. Epiq Scripts also agreed to provide mail service pharmacy services to us on an exclusive basis during the term of the SOW.
We agreed to provide Epiq
Scripts with all custom packaging materials, including but not limited to, individual sachet and/or blister packaging materials, outer
box packaging, and any custom inserts and/or marketing information to accompany the prescription shipment, if any and to provide Epiq
Scripts with quarterly sales forecasts to ensure Epiq Scripts has enough packaging materials on hand to cover a 90-day period. We agreed
to pay for all direct shipping, delivery and related courier costs and to provide Epiq Scripts with direct access to any online accounts
to access and generate shipping labels for the fulfillment and delivery of our products.
The SOW has a term through
December 31, 2025, automatically renewable thereafter for successive one-year terms unless either party terminates the agreement at least
90 days before renewal thereof and the SOW is subject to the same termination rights of the parties as set forth in the Master Services
Agreement (discussed below).
Pursuant to the SOW, we agreed
to pay Epiq Scripts certain fixed rate fees for prescription fulfillment, processing and packaging (per prescription) and drug compounding
(per pill), provided the per pill rate is reduced upon us exceeding 3,500 product packages per month.
Under the Master Services
Agreement, we are solely responsible for billing and collecting funds from our customers and Epiq Scripts is paid out of funds that we
actually collect.
We paid Epiq Scripts a total
of $60,000 upon our entry into the Master Services Agreement, comprising $45,000 as a one-time non-refundable technology systems setup
and implementation fee and $15,000 as an upfront retainer to be credited towards the future provision of pharmacy and related services
as outlined and detailed in the Master Services Agreement and SOW, of which $11,745 remained outstanding as of December 31, 2022 and $84,382
remained outstanding as of September 30, 2023. All costs related to the pharmacy services provided by Epiq Scripts are listed as related
party costs of revenues on our statement of operations.
The Master Services Agreement has a term of five years, automatically renewable to additional one-year terms thereafter unless either party provides the other notice of termination at least 90 days prior to the date of automatic renewal. The Master Services Agreement can be terminated (i) upon breach of the agreement by the other party, subject to a 90-day cure right, (ii) if a party enters into bankruptcy or fails to pay its debts as they become due, or (iii) if Epiq Scripts becomes unable to perform the services covered by the Master Services Agreement and any statements of work associated therewith.
First Amendment
to MSA
On
September 15, 2023, we entered into a First Addendum to Master Services Agreement with Epiq Scripts (the “First Amendment”).
Pursuant to the First Amendment,
the parties agreed to amend the MSA to include certain right of first negotiation rights and right of first refusal rights (each as discussed
below). Additionally, the First Amendment provides for certain rights to Epiq Scripts in the event that the Company seeks to obtain pharmaceutical
services in connection with certain Company products (collectively, “Pharmaceutical Services”) in jurisdictions other than
the United States, including, without limitation, Mexico and the United Kingdom, where Epiq Scripts does not currently maintain licenses
or permits (“Future Jurisdictions”, which shall also include, to the extent applicable, any state in the United States in
which Epiq Scripts does not then hold required permits or licenses for the provision of the Pharmaceutical Services) and/or to terminate
Epiq Scripts’ rights to provide exclusive Pharmaceutical Services in any current state of the United States or Future Jurisdiction
where Epiq Scripts may then be providing Pharmaceutical Services to the Company (each a “Current Jurisdiction”).
Specifically,
the parties agreed in the First Amendment that should the Company decide to transfer any services provided by Epiq Scripts in a Current
Jurisdiction to another pharmaceutical service provider (“Transferred Services”), the Company will be required to pay Epiq
Scripts a fee of 1% of the total gross sales of all Prescription Products (defined below) by the Company resulting from the Transferred
Services in the Current Jurisdiction, for a period of the lesser of (a) five (5) years from the date the Company transferred the Transferred
Services; and (b) through the end of the term of the MSA (including where applicable, any renewal term)(the “Non-Use Fee”).
The Non-Use Fee is payable monthly in arrears, for calendar quarters, by the 15th day following the end of each calendar quarter. “Prescription
Products” means Products (as defined in the MSA) sold by the Company which must be prescribed by a medical doctor.
Notwithstanding
the above, the Non-Use Fee shall not apply, and the Company shall not be obligated to pay any Non-Use Fee (a) in the event that the Transferred
Services are provided directly by the Company or a majority-owned subsidiary of the Company; (b) in the event the Company decides to enter
into an agreement with another pharmaceutical service provider to provide Pharmaceutical Services in a Future Jurisdiction; or (c) in
connection with any services provided by any parties in any Future Jurisdictions.
The
First Amendment also provides that until the fifth anniversary of the First Amendment, the Company shall notify Epiq Scripts in writing
of any plans to (a) expand its need for pharmacy services outside of those contemplated by the MSA; (b) expand its need for pharmacy services
into a new jurisdiction which Epiq Scripts does not then operate in (including, but not limited to new countries); or (c) begin providing
pharmacy services internally (either through organic growth or acquisition). Thereafter Epiq Scripts has the right to provide the Company
written notice of its intention to provide such services (as described in (a) or (b) above, whereafter the Company is required to discuss
and negotiate such services in good faith with Epiq Scripts for a period of not less than 15 days). Otherwise, in the event of the occurrence
of an event discussed in (c) above, the Company is required to discuss the possibility of Epiq Scripts either co-operating the pharmacy
or providing management services to the Company in good faith for 15 days. In the event after such 15 day period, the Company and Epiq
Scripts cannot come to a mutually agreeable agreement, the Company is under no further obligation regarding the matter set forth in the
notice provided to Epiq Scripts.
Finally,
the First Amendment includes a requirement whereby if Epiq Scripts receives notice of any proposed fundamental transaction involving Epiq
Scripts or its assets, including any agreement, arrangement, offer or proposal (including a letter of intent, term sheet, form of definitive
agreement or definitive agreement) for an asset sale or acquisition, merger, acquisition or sale of securities, or redemption or repurchase
of securities, Epiq Scripts must provide the Company notice of such offer within three days, after which receipt the Company will have
the right of first refusal for 30 days to become the purchaser in connection with the notified transaction, on the terms, and subject
to the conditions, set forth in such notified offer and pursuant to the conditions of the First Amendment.
Consulting Agreement
With Epiq Scripts
On September 15, 2023, we entered into a Consulting Agreement (the “Consulting Agreement”) with Epiq Scripts. Pursuant to the Consulting Agreement, Epiq Scripts agreed to provide pharmacy consulting services in connection with the Company’s global expansion efforts, and as reasonably requested by the Company, during the term of the agreement, which is for five years, unless otherwise earlier terminated (a) due to breach of the agreement by either party and the failure to cure such breach 30 days after written notice thereof; (b) the mutual agreement of the parties; or (c) the date that Epiq Scripts provides the Company written notice of termination, which may be at any time and for any reason.
In
consideration for agreeing to provide the services under the agreement, the Company agreed to pay Epiq Scripts (1) a one-time payment
of $65,000, payable within ten days of the entry into the agreement; and (2) a set fee, payable for each prescription drug pill sold by
the Company for cash, to the extent such pill must be prescribed by a medical doctor, or sold through retail pharmacies over the counter,
in jurisdictions where a doctor’s prescription is not required for the sale of such drugs, and sold in a Territory (defined below),
which consideration per pill decreases each year that the agreement is in effect, and is only payable for the first five years of the
agreement.
The
Consulting Agreement further provides that no payments are due for the sale of any prescription pills until the First Sale.
Under
the Consulting Agreement, (a) “Territory” means worldwide, except for the United States, including its territories and possessions
and the District of Columbia; and (b) “First Sale” means the date that the first commercial sale of prescription pills occurs
in the Territory.
Future
payments are also required to be offset equitably for any prescription pill sold which is later refunded, charged back, returned, or reimbursed
to a purchaser.
The
agreement includes customary representations of the parties, confidentiality and non-solicitation provisions, rights of Epiq Scripts to
audit the sales of prescription pills, subject to certain limitations and requirements, and the requirement that the Company reimburse
certain expenses of Epiq Scripts, subject to certain limitations and pre-approvals.
Epiq Scripts Assignments
On January 30, 2025, the Company,
with the approval of the disinterested members of the Board of Directors and the Company’s Audit Committee, made up of independent
members of the Board of Directors, entered into two Assignment, Assumption and Novation Agreements (the “Epiq Scripts Assignments”)
with Epiq Scripts. Pursuant to the Epiq Scripts Assignments, the Company assigned all of its rights under (1) the MSA, as amended; and
(2) the Consulting Agreement, to the Company’s current wholly-owned subsidiary, Mango & Peaches Corp. (“Mango &
Peaches”). Mango & Peaches agreed to take responsibility for all obligations thereunder, effective as of the assignment
date, and Epiq Scripts agreed to novate the responsibility of the Company thereunder, effective as of the assignment date. Additionally,
we agreed to indemnify Mango & Peaches for any liability under such agreements prior to the assignment date and Mango & Peaches
agreed to indemnify us against any liability under such agreements after the assignment date.
Our Customer Portal
Our customer platform connects
consumers to licensed healthcare professionals through our website at www.MangoRX.com for the provision of care via telehealth
and also provides access for customers to a licensed pharmacy for online fulfillment and distribution of certain medications that may
be prescribed as part of a telehealth consultation. Additional features to this backend technology solution allow for the creation and
management of customer accounts whereby customers have the ability to login, view and make changes to their respective accounts, including
reviewing order history, tracking order shipments, requesting and ordering product refills and making other profile changes such as shipping
address and payment changes. Our portal is not unique to the industry and is not anticipated to be difficult or costly to replicate or
replace.
The backend technology solution
also houses and manages all customer data allowing the Company with additional key functionality, including but not limited to, providing
customer service and support and data analytics for various marketing initiatives and reporting functions.
We do not anticipate selling
any third-party products via our portal.
Our Growth Strategy
Utilize a variety of
marketing channels using data analytics to attract customers
We market and advertise our
Mango products on a variety of advertising mediums including social media, online search websites, television, radio, out-of-home, and
other media channels, to the extent we are legally able to, and in compliance with applicable FDA rules and requirements; however, due
to such rules and requirements, we are extremely limited in the content of the claims and promotional statements that we are able to make
regarding our products under applicable FDA regulations. We believe advertising in a diversified set of media channels is important to
prevent overreliance on any single channel and to maximize the exposure of our brand to our desired customers. We also seek to reach our
customers through our own social media accounts, press coverage and public relations, internally developed educational and lifestyle content,
and through engagement of social media influencers, hired and paid celebrities and talent, and physical brand advertising campaigns and
in each case subject to applicable rules and regulations, which are expected to significantly limit the content of such marketing materials.
We believe that this overall strategy will drive customer traffic to our platform, including direct type-in traffic and organic online
search traffic.
We also utilize a marketing
strategy focused on analytics and data. We have designed our internal systems to measure consumer behavior, including which types of consumers
generate more revenue in their first purchase, generate more revenue over time, generate more gross profit from their purchases, and which
types of consumers are most valuable over their lifetime. We also seek to measure the effectiveness of our marketing budgets and the rate
of return we generate from our marketing campaigns. We also use outside marketing and advertising firms to assist management in identifying
marketing and advertising campaigns, media purchases and mediums, and seeking to drive a sufficient rate of return from our marketing
and advertising budgets.
Invest in our telemedicine
platform to enable sales throughout the United States
We utilize both a synchronous and asynchronous approach through our telemedicine platform, connecting customers through our platform and contracted physicians and pharmacy. An asynchronous visit allows a physician to verify the patient’s identity, demographics and collect the medical history online without needing to physically see or speak to the patient while a synchronous visit requires the doctor to either speak directly to the patient and/or see the patient either via video conference or in person.
Provide subscription
plans for recurring revenue and introduction of new products
We provide our customers with
an option to purchase our Pharmaceutical Products on a subscription basis, where and when applicable. Subscription plans provide an easy
and convenient way for customers to get ongoing treatment while simultaneously providing the Company with predictability through a recurring
revenue stream.
For subscription plans, customers
are able to select a desired timeframe in which to receive products, which range from once every month to once every six months. The customer
will then be billed on a recurring basis based on the selected timeframe and specified quantity of product, which is shipped after each
billing from our contracted pharmacy (Epiq Scripts). Customers are able to cancel subscriptions in between billing periods to stop receiving
additional products and reactivate subscriptions. Our integrated technology platform serves customers from customer discovery, through
the purchase of products on our website, to connecting customers with medical providers for telehealth consultations (through our contracted
physician network), to the fulfillment and delivery of orders (through our contracted pharmacy), and finally through ongoing management
by medical providers (also through our contracted physician network). We believe our platform provides us cost advantages and efficiencies
to offer customers affordable prices and to generate increased revenues over time.
In addition to our Pharmaceutical
Products, we intend to launch new products over time and offer additional subscription-based offerings which we hope will result in growth
in revenue through recurring revenue streams.
Market Overview
The Market for ED Products
According to a January 2022
report published by Verified Market Research, the Global Erectile Dysfunction Drugs Market size was valued at $3.63 billion in 2020, mainly
due to the increase in patient awareness and the early adoption of sedentary lifestyle. Verified Market Research also projects that the
total Global Dysfunction Drugs Market size will contract to $2.95 billion in 2028. The expected reason for this contraction is poor patient
compliance with erectile dysfunction drugs and the future availability of cost-effective imitation medicines, as well as side effects
of ED drugs. We do not anticipate our Mango ED drug suffering from these limitations, as we believe our product is easy to use and that
we have priced our product competitively. Separately, Grand View Research, in a July 2022 report, projects that the U.S. market (where
we initially plan to market our ED product) for erectile dysfunction drugs which is estimated at approximately $1.1 billion as of 2021,
will increase at a 7.4% compound annual growth rate though 2030.
It is also estimated that
that nearly 3-in-5 men questioned in the U.S. have suffered from erectile dysfunction, according to a survey reported in February 2022
by LetsGetChecked, a leading at-home health screening and insights company (based on research carried out by Opinium Research among 2,006
men in the U.S., 1,178 of whom had previously experienced erectile dysfunction, from February 7-10, 2020). According to that study, age
isn’t that big a factor either, with 56% of men 18 to 34 years old being affected, compared to 63% of those over the age of 55.
The study also determined that most men blame psychological factors for ED - with 41% blaming stress, 34% blaming having “too much
on their mind,” and 31% believing it is performance anxiety.
The Market for Mango GROW
According to the website of
the American Hair Loss Association, (a) two-thirds of American men will experience some degree of hair loss by the age of 35, (b) by age
50, around 85 percent of men have significantly thinning hair; and (c) for around 25% of men, the start of male pattern baldness can begin
before the age of 21. Additionally, and contrary to societal belief, we believe that most men who suffer from male pattern baldness are
unhappy with their situation and would take steps to change that. In our experience, hair loss affects every aspect of the hair loss sufferer’s
life including interpersonal relationships as well as the professional lives of those suffering.
According to a May 2022 market
study entitled, “Hair Loss Prevention Products Market Forecast to 2028 - COVID-19 Impact and Global Analysis - by Product Type
(Shampoos and Conditioners, Oils, Serums, and Others), Category (Natural & Organic, and Conventional), End User (Men, Women, and Unisex),
and Distribution Channel (Supermarkets and Hypermarkets, Convenience Stores, Online Retail, and Others)”, by The Insight Partners,
the hair loss prevention products market size was valued at $23.6 billion in 2021 and is projected to reach $31.5 billion by 2028, growing
at a projected compound annual growth rate of 4.2% from 2021 to 2028.
Mordor Intelligence LLP believes
that the major factors driving the hair loss prevention market are changing lifestyle patterns, adoption of a hectic schedule that increases
stress levels, which in turn results in frequent hair loss at an earlier stage among the young population, growing disposable income,
and increased emphasis on appearances.
The Market for MOJO
We believe that hypogonadism
(a condition where the gonads (testes in males and ovaries in females) do not produce enough sex hormones) is a growing concern in an
aging male population and is associated with symptoms including decreased libido, erectile dysfunction, loss of lean muscle mass, loss
of vitality, and depression. The most sensitive symptoms supporting a diagnosis of hypogonadism include erectile dysfunction and decreased
libido. Historically treated using exogenous testosterone, concerns about possible adverse effects of testosterone have led physicians
to seek alternative treatment approaches. Enclomiphene citrate is the trans isomer of clomiphene citrate, a non-steroidal estrogen
receptor antagonist that is FDA-approved for the treatment of ovarian dysfunction in women. Clomiphene citrate has also been used off-label
for many years to treat secondary male hypogonadism, particularly in the setting of male infertility.
Enclomiphene citrate, which
is the key active pharmaceutical ingredient found in our Mango MOJO compounded product, has been researched and studied in a Phase II
clinical trial conducted by Ronald D. Wiehle and others, entitled “Enclomiphene citrate stimulates testosterone production while
preventing oligospermia: a randomized phase II clinical trial comparing topical testosterone” (Fertil Steril. 2014 Sep;102(3):720-7.
doi: 10.1016/j.fertnstert.2014.06.004. Epub 2014 Jul 17. PMID: 25044085), which found enclomiphene citrate as being effective in increasing
serum testosterone levels in hypogonadal men, as well as maintaining sperm counts.
According to an April 2022
market study conducted by Allied Market Research, the global male hypogonadism market size was $3.1 billion in 2020, and is projected
to reach $5.1 billion by 2030, growing at a CAGR of 5.1% from 2021 to 2030.
The Market for SLIM
The Semaglutide market size
has grown rapidly in recent years and from $20.54 billion in 2023 to $23.07 billion in 2024 at a compound annual growth rate (CAGR) of
12.3% according to the “Semaglutides Market Report 2024” by Research and Markets. The growth during the historic
period can be attributed to lifestyle changes leading to higher diabetes prevalence, increased investment in research and development,
rising healthcare expenditure, the expansion of pharmaceutical companies into developing regions, and growing acceptance of injectable
therapies.
Semaglutide is the key active
pharmaceutical ingredient found in our Mango SLIM compounded product. According to Research and Markets, the market for semaglutides is
expected to grow to $36.87 billion in 2028, due in part to the increasing global prevalence of diabetes, rising awareness about diabetes
management and treatment, growing demand for effective therapies with fewer side effects, supportive government initiatives and policies
for diabetes treatment, and an aging population contributing to higher diabetes incidence.
Competition and Competitive Advantages
We mainly compete with other
companies offering men’s wellness products, including Hims & Hers Health, Inc. and Roman. With our Mango ED products, we compete
against much larger pharmaceutical companies which offer ED branded drugs like Viagra (Pfizer) and Cialis (marketed by Lilly ICOS LLC,
a joint venture between Eli Lilly and Company and ICOS Corporation) and their generic forms. With our Mango GROW product, we compete against
the much larger pharmaceutical company Merck & Co., which offers the branded hair loss product Propecia and Johnson & Johnson,
the owner of Rogaine® - a branded form of Minoxidil. These companies have much greater resources than we do and well-known brand names.
Our future men’s wellness
products will also likely need to compete against other traditional healthcare providers, pharmacies, and large retailers that sell non-prescription
products.
Furthermore, we compete with
other companies, which have greater resources and a greater advertising budget, and which are also selling a version or some variation
of our Compounded Products and Pharmaceutical Products, overall. We compete against these competitors based on our branding, advertising,
unique compounding, and product delivery system (i.e., our Compounded Products have been designed to be taken sublingually, rather than
in pill form or injectable format). We believe that these alternative delivery methods are one of the Company’s major competitive
advantages and what makes our Pharmaceutical Products more attractive than those sold by some of the larger pharmaceutical manufacturing
companies.
Regulatory Environment
We produce and sell our Mango
ED and Mango GROW product and plan to produce and sell our future pharmaceutical products, under an exemption provided by Section 503A
of the Federal Food, Drug, and Cosmetic Act (“FFDCA Act”). Section 503A describes the conditions under which compounded human
drug products are exempt from the FFDCA Act sections on FDA approval, current good manufacturing practice (“cGMP”) requirements,
and labeling with adequate directions for use. One of these conditions is that the drugs must be compounded based on the receipt of valid
patient-specific prescriptions; another condition limits “copying” of FDA-approved products, which restricts compounding drugs
that have the same active ingredients and route of administration as FDA-approved products that are commercially available. The FDA also
prohibits any marketing or promotional statements that are “false or misleading in any particular,” including making any unsupported
superiority claims against other products or the failure to disclose a material fact.
Notwithstanding the above,
under relevant FDA guidance, the FDA generally does not consider a compounded drug to be “essentially a copy” of a commercially
available drug if the compounded drug has a different route of administration as compared with the approved alternative, and our Mango
ED and Mango GROW products are for a different route of administration (e.g., sublingual). In addition, the FDA does not consider a compounded
drug to be “essentially a copy” of a commercially available drug if the approved product cannot be used for the prescribed
route of administration, which is available in the compounded version (which we believe it cannot, as discussed below). Finally, we do
not expect that we will be deemed to have engaged in such “copying”, because our Mango ED and Mango GROW products are based
on a prescriber’s determination for each patient that the change associated with the compounded product (our Mango ED or Mango GROW
product) produces for the patient a significant difference as compared with the commercially available drug product. Under relevant FDA
guidance, the FDA does not consider a compounded drug “essentially a copy” if a prescriber determines that there is a change,
made for an identified individual patient, which produces for that patient a significant difference from the commercially available product.
Under Section 503A of the
FFDCA Act, it is the prescribing practitioner who determines if a compounded drug is necessary for the identified patient and whether
the change associated with the compounded product produces for the patient a significant difference as compared with the commercially
available drug product. FDA’s guidance states that the FDA generally does not intend to question prescriber determinations that
are appropriately documented. Our Mango ED and Mango GROW compounded products have been formulated as a Rapid Dissolve Tablet using a
sublingual (applied under the tongue) delivery system to bypass the stomach and liver. We believe this offers a significant difference
based on the fact that the approved versions are not available in the same route of administration (i.e., sublingual). A sublingual formulation
may be able to meet the clinical needs of a particular patient who desires a more rapid onset of action compared to an FDA-approved oral
formulation. In addition, because the prevalence of ED generally increases with age, older patients who may have difficulty swallowing
an FDA-approved oral formulation may benefit from a sublingual formulation that dissolves under the tongue.
Compounded drugs, like our
Mango ED and Mango GROW products, are not FDA-approved. This means that the FDA does not verify the safety or effectiveness of such drugs.
Instead, consumers rely on the determination of a prescribing physician that the compounded drug is necessary for the individual patient.
Compounded drugs also lack an FDA finding of manufacturing quality before such drugs are marketed.
The FDA has the authority
to impose significant restrictions on products through regulations on advertising, promotional and distribution activities. In particular,
the FDA will object to any promotional activity (including through testimonials and surrogates) that is “false or misleading in
any particular,” including the failure to disclose material facts. For example, the FDA will expect adequate substantiation for
an efficacy claim, which would require substantial evidence derived from adequate and well-controlled clinical trials. We believe we can
conduct truthful and non-misleading promotional activities, including activities involving the use of testimonials and surrogates, with
limited claims that do not require substantial evidence derived from adequate and well-controlled clinical trials and which do not include
efficacy claims.
We are also aware of data
in the scientific literature supporting how the proposed combination of the compounds which make up our Mango ED products (i.e., Tadalafil
or Sildenafil, Oxytocin, and L-arginine) might be expected to perform in ED patients. Previous clinical studies (none of which we have
paid for or undertaken ourselves) have suggested that either Sildenafil Tadalafil and L-arginine in combination for treatment of ED may
be more effective than either compound alone (see L. Gallo et al., The Daily Therapy With L-Arginine 2,500 mg and Tadalafil 5 mg in Combination
and in Monotherapy for the Treatment of Erectile Dysfunction: A Prospective, Randomized Multicentre Study, 8 SEX MED 178, 184 (June 2020)
- finding that in general, combination therapy with Tadalafil and L-Arginine was superior to monotherapies for the treatment of ED; and
M. Abu El-Hamd & E. Mohammed Hegazy, Comparison of the clinical efficacy of daily use of L-arginine, tadalafil and combined L-arginine
with tadalafil in the treatment of elderly patients with erectile dysfunction, 52 ANDROLOGIA e13640, 3 (Aug. 2020) (“Hamd and Hegazy”)
- finding that the combined daily use of L-arginine with Tadalafil therapy for elderly male patients with ED could significantly increase
Sexual Health Inventory for Men (SHIM) scores and levels of total testosterone in comparison to L-arginine, or Tadalafil alone)-This is
because L-arginine may increase nitric oxide, that in turn may increase cyclic guanosine monophosphate, which has relaxation and vasodilation
(dilatation of blood vessels) effects on smooth muscle to assist in the treatment of ED (see Hamd and Hegazy paper). Furthermore, Oxytocin
is a neurotransmitter linked to increased levels of social interaction, well-being, and anti-stress effects and clinical studies suggest
administration of Oxytocin may stimulate certain aspects of social interaction, and may cause anti-anxiety and anti-stress effects (see
Hamd and Hegazy paper).
Furthermore, we are aware
of data in the scientific literature supporting the efficacy of Minoxidil as an oral treatment (as discussed below), as opposed to topical
treatments that have been more traditionally used and marketed for hair growth to date. Topical Minoxidil and oral Finasteride are current
the standard first-line treatments for androgenetic alopecia (AGA)(male pattern baldness). Minoxidil in an oral formulation has been previously
used for the treatment of severe and uncontrolled hypertension at a dose of 10-40 mg. Unintentionally, the early trials of oral minoxidil
as an antihypertensive drug documented side effects such as hypertrichosis (excessive hair growth anywhere on the body) and hirsutism
(excess hair most often noticeable around the mouth and chin) with chronic use. A study conducted by Ratchathorn Panchaprateep & Suparuj
Lueangarun, and published in the September 24, 2020 edition of Dermatology and Therapy, found that oral minoxidil at a dose of 5 mg taken
once daily, significantly increased hair growth in men with AGA after 12 and 24 weeks of treatment (Panchaprateep, R., Lueangarun, S.
Efficacy and Safety of Oral Minoxidil 5 mg Once Daily in the Treatment of Male Patients with Androgenetic Alopecia: An Open-Label and
Global Photographic Assessment. Dermatol Ther (Heidelb) 10, 1345-1357 (2020)).
Separately, Finasteride taken
orally in the amount of 1 mg per day has shown to promote scalp hair growth and prevent further hair loss in a significant proportion
of men with male pattern hair loss (McClellan, K.J., Markham, A. Finasteride. Drugs 57, 111-126 (1999)).
Neither we, nor our representatives
have had any conversations with the FDA staff regarding whether our Compounded Products can be sold pursuant to Section 503A of the FFDCA
Act and future conversations with the FDA may result in the FDA staff raising issues with such sales pursuant to Section 503A of the FFDCA,
requiring certain pre-requisites or changes to our current business plan, which may be costly or time consuming, and/or may result in
us being prohibited from selling our Compounded Products pursuant to Section 503A of the FFDCA Act.
Master Distribution Agreements
ISFLST
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.
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”.
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.
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.
The Distribution Agreement also includes a non-solicitation obligation
of ISFLST, which applies during the term of the agreement and for two years thereafter.
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.
Propre
On January 30, 2025, the Company entered into
a Master Distribution Agreement (the “MDA”), with Propre Energie Inc. Pursuant to the MDA, the Company will license
certain intellectual property and patent rights from Propre relating to clinically proven, plant-based formulations targeting hyperpigmentation,
dark spots, uneven skin tone, and skin brightening through advanced solutions marketed under the brand Dermytol®.
We agreed pursuant to the MDA to pay Propre 650,000
shares of the Company’s restricted common stock (the “Propre Shares”) and 1% of the gross sales revenue we generate
during the term of the MDA. The MDA has a term of three years, renewable thereafter for up to three additional one year terms, provided
that neither party provides the other notice of termination at least 90 days prior to the renewal date, provided that Propre has a right
of termination in the event we sell substantially all of our assets or a majority interest in the Company during the term and either party
may terminate the agreement if the other party breaches the MDA and fails to cure such breach within 90 days or becomes insolvent.
The MDA contains customary confidentiality provisions,
representations and warranties of the parties, indemnification obligations, disclaimers and covenants, for an agreement of type and size
of the MDA. The Company is still preparing its internal business plans for the marketing, selling and distribution of Dermytol with plans
to commence operations surrounding Dermytol in the 2nd quarter of 2025.
Patent Purchase Agreements
Intramont Technologies
Effective on April 24, 2024,
the Company entered into a Patent Purchase Agreement (the “IP Purchase Agreement”), with Intramont Technologies, Inc.
(“Intramont”). Pursuant to the IP Purchase Agreement, we purchased certain patents and patent applications owned by
Intramont, related to prevention of infections, including the common cold, respiratory diseases, and orally transmitted diseases such
as human papillomavirus (HPV) (the “Patents”), in consideration for $20,000,000, which is payable to Intramont by (a)
the issuance of 980,000 shares of the Company’s newly designated 6% Series C Convertible Preferred Stock (the “Series C
Preferred Stock”), with a face value of $20.00 per share, for a total value of $19,600,000 (the “Series C Shares”);
and (b) $400,000 in cash, (i) with $200,000 payable on or before June 30, 2024, (ii) $100,000 payable on or before August 31, 2024, and
(iii) $100,000 payable on or before November 30, 2024 (collectively, the “Cash Payments”).
The IP Purchase Agreement,
and the purchase of the Patents, closed on April 24, 2024, upon the parties entry into the IP Purchase Agreement, and the Series C Shares
were also issued on April 24, 2024. The IP Purchase Agreement included standard representations and warranties and confidentiality and
indemnification obligations of the parties, for a transaction of that type and size. The Company purchased the Patents through its newly
formed wholly-owned subsidiary, MangoRx IP Holdings, LLC, a Texas limited liability company.
The Intramont IP Purchase
Agreement also included a grant back license, whereby the Company provided Intramont, an irrevocable, co-exclusive, non-transferable and
non-assignable (except in the event of a change of control), non-sublicensable, worldwide, license to use the Patents for the lives thereof
(the “Grant Back-License”). The Grant Back-License is subject to Intramont paying the Company a royalty of ten percent
(10%) of gross worldwide sales of products sold by Intramont which utilize the Patents, beginning on April 24, 2025, and continuing until
the end of the life of the last Patent (the “Royalty Payments”). The Royalty Payments are to be paid to the Company
on an annual basis, within 30 days after the end of the calendar year.
Finally, the IP Purchase Agreement
granted Intramont a right of first refusal, which provides that, if at any time prior to April 24, 2027, if we receive an offer to purchase
the Patents and determine to accept such offer, or we determine to sell the Patents to a third party, we are required to provide Intramont
the right of first refusal to either match such offer, or negotiate different purchase terms for the Patents.
Through May 27, 2025,
$193,469 of the Cash Payments has been paid to date, provided that Intramont has not declared a default under the IP Purchase Agreement
or taken any action against the Company in connection with the failure to timely pay such Cash Payments.
On February 11, 2025, and
effective on December 31, 2024, we and Intramont entered into a letter agreement, amending the IP Purchase Agreement (the “Amendment
Letter”), pursuant to which Intramont has agreed that all funds paid by the Company towards the furtherance and development
of the Patents would be credited against the Cash Payments owed to Intramont and we agreed to work in good faith with Intramont on financing,
developing and commercializing the Patents.
As a result of the Amendment
Letter, a total of $206,531 remains due to Intramont in connection with the Cash Payments as of May 27, 2025, which the Company
expects to pay over time, by way of expenses associated with the development of the Patents.
The Company intends to utilize
the Patents by commencing research, development, clinical trial studies and efficacy testing on a variety of oral applications including,
but not limited to, an oral dissolvable tablet (ODT), lozenge, toothpaste and/or mouthwash.
Description of
the 6% Series C Convertible Cumulative Preferred Stock
The Company submitted for
filing to the Secretary of State of Texas, a Certificate of Designations of Mangoceuticals, Inc. Establishing the Designations, Preferences,
Limitations and Relative Rights of Its 6% Series C Convertible Cumulative Preferred Stock (the “Series C Designation”),
which was filed with the Secretary of State of Texas on April 23, 2024, effective as of April 19, 2024 and which designated 6,250,000
shares of Series C Preferred Stock. The Series C Designation provides for the Series C Preferred Stock to have the following terms:
Dividend Rights: The Series
C Preferred Stock (“Series C Shares”) created under the IP Purchase Agreement include a dividend under which each share of
Series C Preferred Stock is entitled to receive, when, as and if authorized and declared by the Board of Directors of the Company, out
of any funds legally available therefor, cumulative dividends in an amount equal to (i) the 6% per annum on the stated value (initially
$20 per share)(the “Stated Value”) as of the record date for such dividend (as described in the Series C Designation),
and (ii) on an as-converted basis, any dividend or other distribution, whether paid in cash, in-kind or in other property, authorized
and declared by the Board of Directors on the issued and outstanding shares of our common stock, par value $0.0001 per share (the “Common
Stock”) in an amount determined by assuming that the number of shares of Common Stock into which such shares of Series C Preferred
Stock could be converted on the applicable record date for such dividend or distribution. Dividends payable pursuant to (i) above are
payable quarterly in arrears, if, as and when authorized and declared by the Board of Directors, or any duly authorized committee thereof,
to the extent not prohibited by law, on March 31, June 30, September 30 and December 31 of each year (unless any such day is not a business
day, in which event such dividends are payable on the next succeeding business day, without accrual of interest thereon to the actual
payment date), commencing on June 30, 2024. Accrued dividends may be settled in cash, subject to applicable law, shares of Common Stock
(valued at the closing price on the date the dividend is due) or in-kind, by increasing the Stated Value by the amount of the quarterly
dividend.
Liquidation Preference: Upon
any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the
holders of the Series C Preferred Stock are entitled to receive out of the assets, whether capital or surplus, of the Company an amount
equal to the Stated Value (the “Liquidation Preference”), for each share of Series C Preferred Stock, before any distribution
or payment is made to the holders of any junior securities, but after the payment of any liquidation preference of any holder of senior
securities, including the Series B Convertible Preferred Stock, which has a preferential right to payments in liquidation, and if the
assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series
C Preferred Stock are to be ratably distributed among the holders of the Series C Preferred Stock in accordance with the respective amounts
that would be payable on such shares if all amounts payable thereon were paid in full.
Conversion Rights: Each holder
of Series C Preferred Stock may, at its option, convert its shares of Series C Preferred Stock into that number of shares of Common Stock
equal to the Stated Value of such share of Series C Preferred Stock, divided by the conversion price of $10.00 per share (i.e., initially
a 2-for-1 conversion ratio) (the “Conversion Price”), subject to adjustment for stock splits and stock dividends, with
any fractional shares rounded up to the nearest whole share.
The Series C Designation includes
a conversion limitation prohibiting any holder and their affiliates from converting the Series C Preferred Stock into Common Stock shares
in the event that upon such conversion their beneficial ownership of the Common Stock would exceed 4.999% (which can be increased as to
any holder, to up to 9.999%, with 61 days prior written notice by such holder). The Series C Designation also includes a general restriction
prohibiting the issuance of more than 19.99% of the Company’s outstanding shares as of the date of entry into the IP Purchase Agreement,
without the Company’s stockholders approving such issuance(s) under the rules of the Nasdaq Capital Market.
Voting Rights: The Series
C Preferred Stock have no voting rights, except in connection with the protective provisions as discussed within.
Protective Provisions.
So long as any shares of Series C Preferred Stock are outstanding, the Company cannot without first obtaining the approval of the holders
of a majority of the then outstanding shares of Series C Preferred Stock, voting together as a class:
(a) Amend any provision of
the Series C Designation;
(b) Increase or decrease (other
than by redemption or conversion) the total number of authorized shares of Series C Convertible Preferred Stock;
(c) Amend the Certificate
of Formation of the Company (including by designating additional series of Preferred Stock) in a manner which adversely affects the rights,
preferences and privileges of the Series C Preferred Stock;
(d) Effect an exchange, or
create a right of exchange, cancel, or create a right to cancel, of all or any part of the shares of another class of shares into shares
of Series C Preferred Stock; or
(e) Alter or change the rights,
preferences or privileges of the shares of Series C Preferred Stock so as to affect adversely the shares of such series.
Redemption Rights: The Company may redeem the outstanding Series C Preferred Stock shares, from time to time, in whole or in part, at
any time after April 24, 2025, and continuing indefinitely thereafter, at the option of the Company, for cash, at the aggregate Liquidation
Preference of the shares redeemed.
Securities Purchase Agreement
April 2024 Securities Purchase Agreement
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 220,000 shares of Common Stock, 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.
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.
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.
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:
| Closing # | |
Initial Stated Value of
Preferred Stock to be issued
by installment | | |
Warrants to be issued | | |
Closing Date | |
Aggregate Purchase
Price by
installment
(USD) | |
| Initial
Closing | |
$ | 550,000 | | |
| 220,000 | | |
Initial
Closing Date | |
$ | 500,000 | |
| Second Closing | |
| 275,000 | | |
| | | |
On or before June 30, 2024 (the “Second Closing Date”) | |
| 250,000 | |
| Third Closing | |
| 825,000 | | |
| 100,000 | | |
On or before June 30, 2024 | |
| 750,000 | |
| Fourth Closing | |
| 1,100,000 | | |
| | | |
Such date as is no later than 180 days (the “Fourth Closing Date”) after the shares of Common Stock issuable in respect of the Series B Preferred Stock sold in each of the Initial Closing, Second Closing, the Third Closing, and the Fourth Closing have been registered under the Securities Act, subject to any limitations pursuant to Rule 415 (as defined in the Registration Rights Agreement) | |
| 1,000,000 | |
| Total | |
$ | 2,750,000 | | |
| 320,000 | | |
| |
$ | 2,500,000 | |
On April 26, 2024, the Company
partially closed 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.
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.
On May 21, 2024, the Purchaser
converted 50 shares of Series B Preferred Stock into 18,063 shares of Common Stock pursuant to the terms of such Series B Preferred Stock.
On May 22, 2024, the Purchaser
converted 155 shares of Series B Preferred Stock into 55,994 shares of Common Stock, pursuant to the terms of such Series B Preferred
Stock.
On May 24, 2024, the Purchaser
converted 150 shares of Series B Preferred Stock into 54,188 shares of Common Stock, pursuant to the terms of such Series B Preferred
Stock.
On July 9, 2024, the Purchaser
converted 135 shares of Series B Preferred Stock into 35,779 shares of Common Stock, pursuant to the terms of such Series B Preferred
Stock.
On
July 25, 2024, the Purchaser converted 10 shares of Series B Preferred Stock into 2,245 shares of Common Stock, pursuant to the
terms of such Series B Preferred Stock.
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 66,667 shares of common stock at an exercise price of $7.50 per share; and (b) warrants to purchase
up to 33,333 shares of common stock at an exercise price of $15.00 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 were exercisable on or after October 4, 2024, and for five
years thereafter.
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. In connection with the Reverse Stock Split, the exercise price of the Warrants was automatically adjusted to $2.53
per share, and has subsequently been adjusted to $1.50 per share as a result of certain dilutive issuances.
On August 22, 2024, the conditions
to closing were satisfied, and the Company sold the Purchaser an additional 500 shares of Series B Preferred Stock (“Fourth Closing
Shares”) for $500,000 in connection with a partial closing of the Fourth Closing.
On September 26, 2024, the Company sold the Purchaser
an additional 250 shares of Series B Preferred Stock (the “Additional Fourth Closing Shares”) for $250,000 in connection
with a partial closing of the Fourth Closing.
On September 26, 2024, 140
shares of Series B Preferred Stock (with an aggregate stated value of $154,000) were converted by the holder into 47,903 shares of common
stock at a conversion price of $3.21 per share.
On October 2, 2024, 190 shares
of Series B Preferred Stock (with an aggregate stated value of $209,000) were converted by the holder into 66,923 shares of common stock
at a conversion price of $3.12 per share.
On October 18, 2024, 200 shares
of Series B Preferred Stock (with an aggregate stated value of $220,000) were converted by the holder into 93,299 shares of common stock
at a conversion price of $2.36 per share.
On January 15, 2025, the Company
sold the Purchaser the final 250 shares of Series B Preferred Stock (the “Final Fourth Closing Shares”) for $250,000
in connection with a partial and final closing of the Fourth Closing.
On February 12, 2025, a holder
of the Company’s Series B Convertible Preferred Stock converted 216 shares of Series B Convertible Preferred Stock (with an aggregate
stated value of $237,600) into 105,600 shares of Common Stock pursuant to the terms of such Series B Convertible Preferred Stock, including
the current conversion price of $2.25 per share.
The Company’s stockholders
at the 2024 Annual Meeting of Stockholders held on June 17, 2024 approved the issuance of more than 19.99% of the outstanding Common Stock
upon the conversion of the shares of Series B Convertible Preferred Stock and upon the exercise of warrants in accordance with Nasdaq
Listing Rule 5635(d).
Boustead Securities, LLC served
as the Company’s financial advisor in connection with the Purchase Agreement and related transactions.
On March 17, 2025, with the
approval of the shareholders of the Company at the special meeting of shareholders held on the same date, the Company submitted to the
Secretary of the State of Texas, an amendment to the Certificate of Designations, Preferences and Rights of Series B Convertible Preferred
Stock of Mangoceuticals, Inc. (the “Series B Designation”), to: (a) reduce the conversion price set forth therein to
a fixed price of $1.50 per share (subject to customary adjustments for stock splits) (compared to having a fixed conversion price of $2.25
prior to the amendment)(the “Conversion Price”); (b) reduce the floor price set forth therein from $2.25 to $1.50 per
share (subject to customary adjustments for stock splits)(the “Floor Price”); (c) remove the dividend rights set forth
therein (except for standard participatory rights for dividends declared on the Company’s common stock); and exclude the Company’s
current wholly-owned subsidiary, Mango & Peaches Corp. (“Mango & Peaches”), from the definition of Change of
Control Transaction thereunder (as a result, the issuance of securities of Mango & Peaches to Mr. Jacob Cohen, the Company’s
Chief Executive Officer and Chairman, will not be a Change of Control Transaction, trigger an event of default under the Series B Preferred
Stock or be deemed an Equity Condition (as defined in the designation of the Series B Preferred Stock)(the “Designation Amendment”).
The Company’s Series
B Convertible Preferred Stock (“Series B Preferred Stock”), currently have the following rights and privileges:
Dividend Rights.
If the Company declares a dividend or makes a distribution of cash (or any other distribution treated as a dividend under Section 301
of the Internal Revenue Code) on its shares of common stock, each holder of shares of Series B Preferred Stock shall be entitled to participate
in such dividend or distribution in an amount equal to the largest number of whole shares of common stock into which all shares of Series
B Preferred Stock held of record by such holder are convertible as of the record date for such dividend or distribution, if any, or, if
there is no specified record date, as of the date of such dividend or distribution. Notwithstanding the foregoing, holders shall have
no right of participation in connection with dividends or distributions made to stockholders of shares of common stock consisting solely
shares of common stock.
So long as any Series B Preferred
Stock remain outstanding, 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, Series B Preferred Stock or preferred share equivalents (or a combination
of units thereof) involving a Variable Rate Transaction, except for an equity line of credit. “Variable Rate Transaction”
means a transaction in which the Company issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive additional shares of common stock or Series B Preferred Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the common stock or
Series B Preferred Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise
or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the common
stock or Series B Preferred Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an
“at-the-market offering”, whereby the Company may issue securities at a future determined price.
Liquidation Preference.
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”),
the holders of the Series B Preferred Stock are entitled to receive out of the assets, whether capital or surplus, of the Company an amount
equal to the Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing,
for each share of Series B Preferred Stock, before any distribution or payment shall be made to the holders of any junior securities,
and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the holders
of the Series B Preferred Stock shall be ratably distributed among the holders of the Series B Preferred Stock in accordance with the
respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or
Change of Control Transaction (each as described in the Series B Destination) is not deemed a Liquidation.
Conversion Rights.
Each holder of Series B Preferred Stock may, at its option, convert its shares of Series B Preferred Stock (each a “Series B
Conversion”) into that number of shares of common stock equal to the Stated Value of such share of Series B Preferred Stock,
divided by $1.50 (the “Conversion Price”).
In the event the Company does
not comply with the terms of the designation and timely issue shares of common stock upon conversion to the holder, the Company is liable
for damages in cash, as liquidated damages and not as a penalty, for each $5,000 of Stated Value of preferred shares being converted,
$50 per trading day (increasing to $100 per trading day on the fifth trading day and increasing to $200 per trading day on the tenth trading
day after such damages begin to accrue) for each trading day after the date due that the shares are delivered. The designation also provides
for customary buy-in rights to the holders for failure of the Company to timely deliver conversion shares.
The Series B Designation includes
a conversion limitation prohibiting any holder and their affiliates from converting the Series B Preferred Stock into common stock in
the event that upon such conversion their beneficial ownership of the Company’s common stock would exceed 4.99%.
The Conversion Price is subject
to anti-dilutive rights in the event that the Company issues any shares of common stock or common stock equivalents with a value less
than the then conversion price, subject to certain customary exceptions for equity plan issuances, securities already outstanding, and
certain strategic acquisitions (the “Anti-Dilutive Rights”).
Additionally, if at any time
the Series B Preferred Stock 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 Conversion Price then in effect, then
on the sixth trading day immediately following such Share Combination Event Date, the Conversion Price then in effect on such sixth trading
day is automatically reduced (but in no event increased) to the greater of the (i) Event Market Price; and (ii) the Conversion Price (the
“Reverse Split Reset Terms”). 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.
Voting Rights.
The Series B Preferred Stock have no voting rights, except in connection with the Protective Provisions discussed below.
Provisions.
So long as any shares of Series B Preferred Stock are outstanding, the Company cannot without first obtaining the approval of the holders
of a majority of the then outstanding shares of Series B Preferred Stock, voting together as a class (collectively, the “Protective
Provisions”):
(a) Amend any provision
of the Series B Designation;
(b) Increase or
decrease (other than by redemption or conversion) the total number of authorized shares of Series B Preferred Stock;
(c) Amend the Certificate
of Formation of the Company (including by designating additional series of Preferred Stock) in a manner which adversely affects the rights,
preferences and privileges of the Series B Preferred Stock;
(d) Effect an exchange,
or create a right of exchange, cancel, or create a right to cancel, of all or any part of the shares of another class of shares into shares
of Series B Preferred Stock; or
(e) Alter or change
the rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares of such series.
Additionally, so long as any
Series B Preferred Stock shares remain outstanding, neither the Company nor any subsidiary thereof shall redeem, purchase or otherwise
acquire, directly or indirectly, any junior securities; pay any dividends (other than on Series B Preferred Stock), or enter into any
variable rate transaction.
Events of Default.
An “Event of Default” under the Series B Designation includes the occurrence of any of the events described below:
(a) if at any time
the common stock is no longer DWAC eligible;
(b) a registration
statement of the Company is not filed within sixty (60) days of the date Series B Preferred Stock was first issued in connection with
certain shares of Series B Preferred Stock sold in 2024 and January 2025, which requirement has been met;
(c) the Company
fails to obtain stockholder approval of the issuance of more than 20% of the Company’s outstanding common stock in connection with
the sale of certain securities within one hundred twenty (120) days of the first sale thereof (which requirement was timely met);
(d) the Company
shall fail to deliver shares issuable upon a conversion prior to the fifth trading day after such shares are required to be delivered;
(e) the Company
shall fail to have available a sufficient number of authorized and unreserved common stock shares to issue to any holder upon a conversion
completed under the Series B Designation;
(f) the Company
shall fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of any documents
entered into in connection with the sale of Series B Preferred Stock, and such failure or breach shall not, if subject to the possibility
of a cure by the Company, have been cured within 10 business days after the date on which written notice of such failure or breach shall
have been delivered;
(g) the Company
shall redeem junior securities or pari passu securities;
(h) the Company
shall be party to a Change of Control Transaction (as defined in the Series B Preferred Stock designation);
(i) the Company
shall enter bankruptcy;
(j) any monetary
judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property
or other assets for more than $500,000 (provided that amounts covered by the Company’s insurance policies are not counted toward
this $500,000 threshold), and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of
thirty (30) trading days;
(k) the electronic
transfer by the Company of common stock shares through the Depository Trust Company is no longer available or is subject to a “freeze”
and/or “chill”, which continues for a period of five trading days; or
(l) the common shares
shall cease trading on an approved trading market, and such failure shall continue for a period of five trading days.
Following an Event of Default,
(a) the Stated Value increases automatically by an amount equal to 17.5% of the Stated Value as of the date of the Event of Default; and
(b) the conversion price of the Series B Preferred Stock is adjusted to the lesser of (i) the then applicable conversion price and (ii)
a price per share equal to sixty five percent (65%) of the average of the three lowest trading prices for the Company’s common stock
during the twenty (20) trading days preceding the relevant conversion.
Negative Covenants:
As long as any shares of Series B Preferred Stock are outstanding, unless a simple majority of holders of the Series B Preferred Stock
have otherwise given prior written consent, the Company shall not, and shall not permit any of the subsidiaries to, directly or indirectly:
(a) amend its charter
documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects
any rights of any holder;
(b) repay, repurchase
or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of common stock, common stock equivalents or
junior securities, other than as to (i) certain pre-approved purchases agreed to by the holders of the Series B Preferred Stock and (ii)
the repurchase of common shares or common share equivalents of departing officers and directors of the Company, provided that such repurchases
shall not exceed an aggregate of $100,000 for all officers and directors for so long as the Series Preferred Stock are outstanding;
(c) pay cash dividends
or distributions on junior securities of the Company;
(d) enter into any
transaction with any affiliate of the Company which would be required to be disclosed in any public filing with the SEC, unless such transaction
is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less
than a quorum otherwise required for board approval);
(e) redeem any junior
securities or pay any dividends (other than on the Series B Preferred Stock); or
(f) enter into any
agreement with respect to any of the foregoing.
Redemption Rights.
At any time while the Series B Preferred Stock are outstanding, and on any date following stockholder approval of the issuance of more
than 20% of the Company’s common stock upon conversion of certain shares of Series B Preferred Stock certain shares of Series B
Preferred Stock sold in 2024 and January 2025 (which has occurred to date), the Company has the right to redeem fifty (50%) of the Stated
Value then outstanding, and an additional fifty (50%) percent of the Stated Value then outstanding upon the written consent of the holders
of the Series B Preferred Stock (each, the “Company Optional Redemption Amount”) on the Company Optional Redemption
Date (each as defined below) (a “Company Optional Redemption”). If redeemed within ninety (90) calendar days from the
date of issuance, the Series B Preferred Stock shares subject to redemption shall be redeemed by the Company in cash at a price (the “Company
Optional Redemption Price”) equal to 110% of the Stated Value being redeemed as of the Company Optional Redemption Date, plus
all accrued but unpaid dividends and all other amounts due to a holder, if any. If redeemed within ninety-one (91) calendar days after
the date of issuance, but no later than one hundred twenty (120) calendar days from the date of issuance, the Series B Preferred Stock
subject to redemption shall be redeemed by the Company in cash at a Company Optional Redemption Price equal to 115% of the Stated Value
being redeemed as of the Company Optional Redemption Date, plus all accrued but unpaid dividends and all other amounts due to holders,
if any. If redeemed after one hundred twenty (120) calendar days from the date of issuance, the Series B Preferred Stock subject to redemption
shall be redeemed by the Company in cash at a Company Optional Redemption Price equal to 120% of the Stated Value being redeemed as of
the Company Optional Redemption Date, plus all accrued but unpaid dividends and all other amounts due to any holder, if any. The Company
may deliver only one Company Optional Redemption Notice and such Company Optional Redemption Notice shall be irrevocable.
The Company may not deliver
a Company Optional Redemption Notice, and any Company Optional Redemption Notice delivered by the Company shall not be effective, unless
all of the Equity Conditions have been met on each trading day during the period beginning on the date notice of the redemption is provided
and ending on the redemption date, which cannot be less than 10 nor more than 20 days.
“Equity Conditions”
means, during the period in question: (a) the Company shall have duly honored all conversions scheduled to occur or occurring by virtue
of one or more notices of conversion of the applicable holder on or prior to the dates so requested or required, if any; (b) the Company
shall have paid all liquidated damages and other amounts owing to the applicable holder in respect of the preferred shares; (c) (i) there
is an effective registration statement or Rule 144 can be relied upon pursuant to which either: (A) the Company may issue conversion shares
except in the case of a redemption, where only the shares being redeemed are subject to this requirement; or (B) the holders are permitted
to utilize the prospectus thereunder to resell all of the common shares issuable pursuant to certain transaction documents (and the Company
believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future); or (ii) all of the conversion
shares issuable pursuant to the applicable transaction documents may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions
or current public information requirements as determined by the counsel to the Company as set forth in a written opinion letter to such
effect, addressed and acceptable to the transfer agent and the affected holders; or (iii) all of the conversion shares may be issued to
the holder pursuant to Section 3(a)(9) of the Securities Act and immediately resold without restriction; (d) the common shares are trading
on a trading market and all of the common shares issuable pursuant to the applicable transaction documents are listed or quoted for trading
on such trading market (and the Company believes, in good faith, that trading of the common shares on a trading market will continue uninterrupted
for the foreseeable future); (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, common shares for
the issuance of all of the shares then issuable pursuant to the applicable transaction documents; (f) the issuance of the common shares
in question to the applicable holder would not violate the beneficial ownership limitation set forth in the designation; (g) there has
been no public announcement of a pending or proposed Fundamental Transaction (as defined in the designation) or Change of Control Transaction
(as defined in the designation) that has not been consummated; (h) the applicable holder is not in possession of any information provided
by the Company, any of its subsidiaries, or any of their officers, directors, employees, agents or affiliates, that constitutes, or may
constitute, material non-public information.
Additional Private Sales of Series B Preferred
Stock and Common Stock
Effective on December 18,
19, and 31, 2024 and January 3, 6 and 6, 2025, we agreed to definitive terms on Securities Purchase Agreements (the “SPAs”),
with certain institutional accredited investors (the “Purchasers”), pursuant to which the Company sold the Purchasers,
and the Purchasers purchased from the Company, 250 shares of Series B Preferred Stock for $250,000, and warrants to purchase 330,000 shares
of common stock with an exercise price of $2.71 per share, 100 shares of Series B Preferred Stock for $100,000, and warrants to purchase
132,000 shares of common stock with an exercise price of $2.57 per share, 50 shares of Series B Preferred Stock for $50,000, and warrants
to purchase 60,000 shares of common stock, with an exercise price of $2.57 per share; 300 shares of Series B Preferred Stock for $300,000,
and warrants to purchase 396,000 shares of common stock with an exercise price of $2.61 per share; 500 shares of Series B Preferred Stock
for $500,000, and warrants to purchase 660,000 shares of common stock with an exercise price of $2.59 per share; and 50 shares of Series
B Preferred Stock for $50,000, and warrants to purchase 66,000 shares of common stock with an exercise price of $2.59 per share, respectively.
Each of the SPAs closed on the dates they were entered into, and the warrants were granted on the same dates.
The SPAs provide that until
the 18th month anniversary of the applicable closing date, the Purchasers have the right
to participate in any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents or any offering of
debt or any other type of financing, or a combination thereof (other certain customary exempt issuances)(each a “Subsequent Financing”),
in an amount not to exceed the amount of the Purchaser’s subscription, on the same terms, conditions and price provided for in the
Subsequent Financing.
The SPAs contain customary
representations, warranties and covenants by the Company (including a restriction on entering into any variable rate transaction for a
period of 180 days from the applicable closing date), customary conditions to closing, indemnification obligations of the Company and
the Purchasers, other obligations of the parties and termination provisions.
If at any time following the
Initial Exercise Date (as defined below) of the warrants, 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 as described in greater detail in the Common Share Purchase Warrants entered into to evidence the warrants (the “Warrant
Agreements”). The warrants are exercisable on or after 180 days from their grant date (“Initial Exercise Date”),
and for five years thereafter.
The warrants contain provisions
that prohibit exercise if the holder thereof, 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. A 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, a 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.
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 SPAs).
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.
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.
As a result of a dilutive
issuance, the exercise price of the warrants was automatically reduced to $1.50 per share.
On February 3, 2025, the Company
entered into a Subscription Agreement with an accredited investor and sold 70,000 shares of the Company’s restricted common stock
for a total of $105,000, $1.50 per share. The Subscription Agreement included customary representations and warranties of the purchaser
and the Company.
On February 7, 2025, the Company
entered into a Subscription Agreement with an accredited investor and sold 155,555 shares of the Company’s restricted common stock
for a total of $350,000 (or $2.25 per share). The Subscription Agreement included customary representations and warranties of the purchaser
and the Company.
2025 Securities Purchase
Agreement
On April 11, 2025, the Company,
agreed to definitive terms on a Securities Purchase Agreement (the “SPA”), with an institutional accredited investor
(the “Purchaser”), pursuant to which the Company sold the Purchaser, and the Purchaser purchased from the Company:
100 shares of Series B Convertible Preferred Stock of the Company (“Series B Preferred Stock”) for $100,000.
The SPA closed on April 11,
2025, and provided that until the 18th month anniversary of the closing date of the SPA, the Purchaser has the right to
participate in any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents or any offering of debt
or any other type of financing, or a combination thereof (other certain customary exempt issuances)(each a “Subsequent Financing”),
in an amount not to exceed the amount of the Purchaser’s subscription, on the same terms, conditions and price provided for in the
Subsequent Financing.
The SPA contains customary
representations, warranties and covenants by the Company (including a restriction on entering into any variable rate transaction for a
period of 180 days from the closing date of the SPA), customary conditions to closing, indemnification obligations of the Company and
the Purchaser, other obligations of the parties and termination provisions.
The terms of the Company’s
Series B Preferred Stock, which each have a stated value of $1,100 per share, are described in greater detail in the Current Reports on
Form 8-K filed with the Securities and Exchange Commission (SEC) on April 11, 2024, July 2, 2024 and March 17, 2025, which description
is incorporated by reference herein.
Promissory Note
On April 15, 2025, the Company
borrowed $500,000 from Indigo Capital LP (the “Holder”), which loan was evidenced by a Promissory Note dated April
15, 2025 (the “Promissory Note”). The Promissory Note bears interest at 18% per annum, compounded monthly, with accrued
interest payable in full on the maturity date, subject to acceleration and prepayment terms as described below.
The Promissory Note matures
on the earlier of (i) April 15, 2026 (the “Stated Maturity Date”), (ii) the date on which the Holder provides written
notice of acceleration following an event of default or other specified triggering event, and (iii) five (5) business days following the
closing of a Qualified Funding (a “Mandatory Prepayment”). “Qualified Financing” means a fundraising
by the Company, other than in connection with the sale of notes on substantially similar terms as this Promissory Note, after the date
of the Promissory Note, for the principal purpose of raising capital.
Under the terms of the Promissory
Note, the Company may prepay the outstanding obligations under the Promissory Note in whole or in part at any time prior to the Maturity
Date, subject to a prepayment premium equal to the amount of interest which would have accrued had the Promissory Note been outstanding
(and accruing interest) until the Stated Maturity Date (the “Prepayment Premium”). The Company is also required to
make the Prepayment Premium upon the occurrence of a Mandatory Prepayment.
Upon an event of default,
including nonpayment, breach of covenants, material misrepresentation, bankruptcy or insolvency proceedings, or dissolution, among others,
the outstanding amount of the Promissory Note automatically increases to (a) the then principal amount thereof, plus (b) a default amount,
equal to the amount of interest which would have accrued had the Promissory Note been outstanding (and accruing interest) until the Stated
Maturity Date, minus accrued interest through the date of the occurrence of the event of default. The Holder may, upon such default, declare
all outstanding obligations immediately due and payable (including the default amount discussed above, and all accrued and unpaid interest).
The Promissory Note contains
customary representations and warranties, affirmative covenants, and negative covenants for a transaction of this nature. The Company’s
obligations under the Promissory Note are unsecured.
The foregoing description
of the Promissory Note does not purport to be complete and is qualified in its entirety by reference to the full text of the Promissory
Note, a copy of which is filed herewith as Exhibit 10.2, and is incorporated herein by reference.
The Series B Preferred Stock
each have an initial stated value of $1,100 per share (the “Stated Value”), 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.
The Company’s stockholders
at the 2024 Annual Meeting of Stockholders held on June 17, 2024 approved the issuance of more than 19.99% of the outstanding Common Stock
upon the conversion of the shares of Series B Convertible Preferred Stock and upon the exercise of warrants in accordance with Nasdaq
Listing Rule 5635(d).
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 were sold, and which may be sold, at the Initial Closing,
Second Closing, Third Closing and Fourth Closing (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 of 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.
The Company previously filed
a registration statement to register the shares of Common Stock underlying the 500 shares of Series B Preferred Stock issued in the Initial
Closing (the “Prior Registration Statement”). As described in the table above, the 500 shares of Series B Preferred Stock
and the 3.3 million warrants were issued at the initial closing pursuant to the Purchase Agreement. The Prior Registration Statement was
declared effective by the Securities and Exchange Commission on May 9, 2024.
The Amendment also amended
the Purchase Agreement to remove an option that the Purchaser previously had to purchase up to an additional $1,000,000 of Series B Preferred
Stock; to amend a registration rights agreement entered into in connection with the Initial Closing (the “Registration Rights Agreement”)
to clarify that the Warrant Shares are part of the shares required to be registered by the Company under the Securities Act; and to require
the Company, within 10 days of the entry into the Amendment, to (a) reduce the number of shares of Common Stock subject to the Prior Registration
Statement from 30,014,286 shares of Common Stock to 14,666,667 shares of Common Stock, and (b) to register an additional 1,500,000 shares
of Common Stock issuable upon exercise of the Warrants. A required condition of the Amendment was that the Company and the Purchaser amend
the designation of the Series B Preferred Stock to increase the floor price thereof from $0.035 per share to $0.15 per share.
Finally, the SPA provides
that until the 18th month anniversary of the Closing Date, the Purchaser has the right
to participate in any issuance by the Company or any of its subsidiaries of Common Stock or Common Stock equivalents or any offering of
debt or any other type of financing, or a combination thereof (other than certain customary exempt issuances)(each a “Subsequent
Financing”), in an amount not to exceed the amount of the Purchaser’s subscription, on the same terms, conditions and
price provided for in the Subsequent Financing.
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.
Warrants
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 120th 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”).
At the Third Closing, the
Company issued the Purchaser the Warrants to purchase up to 1,000,000 shares of Common Stock at an exercise price of $0.50 per share;
and 500,000 shares of Common Stock at an exercise price of $1.00 per share. 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 120th
day after the Third 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 Warrant Agreement.
The Warrants are exercisable
on or after October 4, 2024, and for five years thereafter.
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.
ELOC
Also on the Initial Closing
Date, the Company entered into an Equity Purchase Agreement (the “ELOC”) with the Purchaser pursuant to which the Purchaser
committed to purchase up to $25,000,000 (the “Maximum Amount”) of the Company’s Common Stock (the “Financing”).
On the Initial Closing Date, the Company issued 1,000,000 shares of the Company’s Common Stock to the Purchaser as a commitment
fee (the “Commitment Shares”). In connection with the Financing, on the Closing Date, the Company and the Purchaser
also entered into a Registration Rights Agreement (the “ELOC RRA”).
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.
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. From May 21, 2024 to December 04, 2024,
the Company has sold a total of 305,000 shares for gross proceeds of $1,185,019 before fees, discounts and expenses under the ELOC.
The ELOC terminates upon the
first to occur of April 4, 2026; the date that $25,000,000 in Advance Shares have been purchased by the Purchaser; the date that the Company
terminates the ELOC, which may be terminated in the Company’s option at any time following effectiveness of the Registration Statement
registering the resale of the Advance Shares, except that the ELOC can’t be terminated at any time the Purchaser holds any Advance
Shares; and upon the Company entering into bankruptcy protection (such period of time that the ELOC is in place, the “Commitment
Period”).
Pursuant to the ELOC, the
Purchaser agreed, that neither it, nor any of its affiliates, will in any manner whatsoever, directly or indirectly, during the period
commencing on the date of the ELOC and ending on (x) earlier of the date of the delivery of the first Advance Notice by the Company, and
(y) the date that is six months from the date the ELOC was entered into (the “Lock-Up Termination Date”), (i) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, make any short sale, or otherwise transfer or dispose of, any shares of Common
Stock; (ii) enter into any transaction that is designed to, or might reasonably be expected to, result in the transfer to another person,
in whole or in part, any of the economic consequences of ownership of any shares of Common Stock (each, a “Disposition”);
or (iii) publicly disclose the intention to make any Disposition or engage in any short sale, without the prior written consent of the
Company.
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.
While the Company has the
obligation to maintain such share reserve while the ELOC is effective, the Company does not have the obligation to sell any Advance Shares
to the Purchaser. Additionally, neither the Purchaser, nor any affiliate of the Purchaser acting on its behalf or pursuant to any understanding
with it, will execute any short sales during the period from the date hereof to the end of the Commitment Period.
The Company has agreed, among
other things, to indemnify the Purchaser and its affiliates with respect to certain liabilities and to pay all fees and expenses incident
to the Company’s obligations under the ELOC RRA.
Registration Rights Agreement
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.
The Prior Registration Statement
was filed in compliance with the Company’s obligations pursuant to the ELOC RRA.
The Company has agreed, among
other things, to indemnify the Purchaser and its affiliates with respect to certain liabilities and to pay all fees and expenses incident
to the Company’s obligations under the ELOC RRA.
The ELOC and the ELOC RRA contain customary affirmative and restrictive covenants and representations and warranties, customary conditions to closing of the sales of the Advance Shares, as well as customary indemnification obligations by each party, including for liabilities under the Securities Act, and other obligations of the parties and termination provisions.
Marketing Agreement
On December 10, 2023, we entered
into a Marketing Agreement with Marius Pharmaceuticals, LLC (“Marius”) allowing us the use of the trademark “Kyzatrex®”
oral testosterone undecanoate softgel capsules (the “Marius Marks”), for the purposes of branding, packaging, marketing, and
selling Kyzatrex® on our website, and to be sold via our telehealth platform at www.MangoRx.com (the “Marius Agreement”).
Pursuant to the Marketing Agreement, Marius granted us a non-exclusive, non-transferable, royalty-free license to use the Marius Marks
in the United States, for the purpose discussed above.
The Marius Agreement contains
customary confidentiality and indemnification provisions and has an initial term of two years, automatically renewable thereafter for
successive one year terms unless otherwise terminated (a) by Marius if we do not have at least 2,500 monthly customers of “Kyzatrex®”
oral testosterone undecanoate softgel capsules (the “Minimum Subscribers”) at least 30 days prior to the end of the initial
term, (b) by either party for cause in connection with a material breach that has not been cured within 30 business days of written notice
thereof provided by the non-breaching party to the breaching party, or (c) by Marius in its sole discretion without cause by providing
at least 60 days’ prior written notice to us. Marius may also terminate the agreement with written notice to us if we have not met
at least 30% of the Minimum Subscribers within six months of the product launch date on our website, which is anticipated to commence
on or before January 31, 2024.
Within 30 days of the date
the Marius Agreement is terminated (or on the date of termination, which cannot occur earlier than 60 days after notice of termination
is provided, if Marius terminates the Marius Agreement for convenience), we are required to stop and cease all use of the Marius Marks
and are required to remove all references to the Marius Marks from our advertising/promotional materials, and signage.
During the term of the Marius
Agreement and for a period of 12 months thereafter, we agreed to not create, publish or broadcast any advertisement or otherwise promote
or market any other product containing testosterone undecanoate.
Pursuant to the Marius Agreement,
and in consideration of the license granted thereunder, we issued Marius 100,000 shares of our restricted Common Stock (the “Marius
Shares”) which are fully earned upon entry into the agreement. The Marius Shares were valued at $0.68 per share for a total of $68,000.
Compensatory Arrangements
of Certain Officers
Effective on April 10, 2025,
the Company issued, after recommendation by the Compensation Committee of the Company’s Board of Directors and approval by the
Board of Directors, an aggregate of 335,000 fully-vested and earned shares of Company common stock under the Company’s Second Amended
and Restated Mangoceuticals, Inc. 2022 Equity Plan (the “Plan”), as a discretionary bonus for consideration for services
rendered during 2025, to certain of the Company’s officers and directors, as discussed below. The Plan has been registered on Form
S-8 Registration Statements previously filed by the Company.
Rescission
Agreements – ArcStone, Smokeless and Strategem
As
previously disclosed, on April 18, 2025, the Company entered into a Consulting Agreement with ArcStone Securities and Investments Corp.
(“ArcStone” and the “ArcStone Agreement”), whereby ArcStone agreed to provide financial advisory, investor awareness
and related consulting services as reasonably requested by the Company during the term of the agreement, which was for six months. In
consideration for agreeing to provide the services under the agreement, the Company issued ArcStone 100,000 shares of restricted common
stock valued at $2.57 per share for a total of $257,000 (the “ArcStone Shares”).
As
previously disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on April 25,
2025 (the “April Form 8-K”), on April 24, 2025, the Company entered into, and closed the transactions contemplated by, an
Intellectual Property Purchase Agreement (the “IP Purchase Agreement”), with Smokeless Technology Corp. (“Smokeless”).
Pursuant to the IP Purchase Agreement, we purchased certain intellectual property, contracts, and know-how owned by Smokeless related
to certain intellectual property and related assets including, without limitation, all patents, trademarks, product formulations, know-how,
agreements, contracts, contractor agreements, supply chain contracts, manufacturing contacts and agreements for the entrance into a new
business involving and surrounding oral pouches as a delivery mechanism for nutritional and wellness products (collectively, the “Purchased
IP”), in consideration for 1,600,000 shares of the Company’s restricted common stock (the “Smokeless Shares”)
and the requirement to make certain royalty payments.
As
previously disclosed in the April Form 8-K, on April 24, 2025, we entered into a Consulting Agreement with Strategem Solutions Inc. (“Strategem”
and the “Strategem Agreement”), pursuant to which Strategem agreed to provide us the services of Tim Corkum (“Corkum”),
in the capacity of President of a to be formed wholly-owned subsidiary of the Company, and to provide us consulting services related
to the development of a pouch division, product innovation, business development, and commercialization strategy for a smokeless product
vertical. In consideration for agreeing to provide the services under the agreement, the Company agreed to issue an aggregate of 120,000
shares of the Company’s common stock to Strategem (the “Strategem Shares”) under the Mangoceuticals, Inc. 2022 Equity
Incentive Plan, which were to vest at a rate of 10,000 shares per month with the first month vesting upon execution of the Strategem
Agreement. We also agreed to pay Strategem $12,500 per month in cash during the term of the Strategem Agreement, which would accrue on
a monthly basis until the Company had completed a successful raise of an aggregate of at least $1.5 million from the sale of either debt
or equity of the Company after the date of the agreement.
On
May 22, 2025, the Company entered into three separate Mutual Rescission and Release Agreements (each a “Rescission Agreement”)
with each of ArcStone, Smokeless and Strategem, pursuant to which: (a) the Company and ArcStone agreed to terminate and rescind the ArcStone
Agreement, effective as of May 22, 2025, each of the parties provided mutual releases of their obligations under the ArcStone Agreement,
subject to certain continuing representations and warranties of ArcStone, and ArcStone agreed to cancel 50,000 of the ArcStone Shares,
with the remaining 50,000 ArcStone Shares being retained by ArcStone in consideration for services rendered through the date of entry
into the Rescission Agreement with ArcStone; (b) the Company and Smokeless agreed to terminate and rescind the IP Purchase Agreement,
effective as of May 22, 2025, each of the parties provided mutual releases of their obligations under the IP Purchase Agreement, subject
to certain continuing representations and warranties of Smokeless; the Company agreed to return all of the Purchased IP to Smokeless,
and Smokeless agreed to cancel all 1,600,000 of the Smokeless Shares; and (c) the Company and Strategem agreed to terminate and rescind
the Strategem Agreement, effective as of May 22, 2025, each of the parties provided mutual releases of their obligations under the Strategem
Agreement, subject to certain continuing representations and warranties of Strategem; and Strategem agreed to waive any obligation of
the Company to issue the 120,000 Strategem Shares, which have not been issued to date (collectively, (a) through (c), collectively, the
“Rescissions”).
No
material early termination penalties were incurred by the Company in connection with the Rescissions, except for the 50,000 ArcStone
Shares which were retained by ArcStone in consideration for services rendered through the date of entry into the Rescission Agreement
with ArcStone.
Implications of Being an Emerging Growth Company
We
qualify as an “emerging growth company” as defined in the federal securities laws. An emerging growth company may take advantage
of specified reduced reporting and other burdens that are otherwise applicable generally to public companies in the United States. These
provisions include:
| ● |
a requirement to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure in this prospectus; |
| |
|
| ● |
reduced executive compensation disclosure; and |
| |
|
| ● |
an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002. |
We
may choose to take advantage of some but not all of these reduced disclosure requirements. We may take advantage of these provisions until
we are no longer an emerging growth company. We will remain an emerging growth company until the earliest to occur of: (1) (a) December
31, 2028 (the last day of the fiscal year following the fifth anniversary of the closing of the Company’s IPO on March 21, 2023),
(b) the last day of the fiscal year in which our annual gross revenues are $1.235 billion or more, or (c) the date on which we are deemed
to be a “large accelerated filer,” under the rules of the SEC, which means the market value of our equity securities that
is held by non-affiliates exceeds $700 million as of the end of our second quarter, and (2) the date on which we have issued more than
$1.0 billion in non-convertible debt during the prior three-year period.
In
addition, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to
private companies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Emerging
Growth Company and Smaller Reporting Company Status” in our Annual Report on Form 10-K. We have elected to use the extended transition
period. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies
that comply with such new or revised accounting standards.
The Offering
This prospectus relates to
the offer and sale from time to time of up to an aggregate of 4,461,718
shares of Common Stock consisting of: (i) 1,960,709 shares of Common Stock issuable upon exercise of the Warrants, (ii) 476,667 shares
of Common Stock issuable upon conversion of 650 shares of Series B Preferred Stock with each share having a stated value of $1,100 and
having a conversion price of $1.50 per share; (iii) 393,333 shares of Common Stock issuable upon conversion of the Note; and (iv) 1,631,009
already issued shares of Common Stock comprised of (a) 550,000 shares of Common Stock issued upon conversion of 750 shares of Series
B Preferred Stock; (b) 376,009 shares of Common Stock issued to certain institutional accredited investors (with 70,000 shares purchased
at a price per share of $1.50; 70,454 shares purchased at a price per share of $1.65; 155,555 shares purchased at a price per share of
$2.25; and 80,000 shares purchased at a price per share of $2.50); (c) 100,000 shares of Common Stock issued upon conversion of a $150,000
convertible promissory note dated December 13, 2024 and converted into shares of Common Stock on January 15, 2025 at a price per share
of $1.50; and (d) 605,000 shares of Common Stock beneficially owned by Jacob Cohen, our Chairman and Chief Executive Officer.
The
number of shares ultimately offered for resale by the selling stockholders depends upon how much of the Series B Preferred Stock,
Warrants and the Note the selling stockholders elect to convert and exercise, respectively, and the liquidity and market price
of shares of our Common Stock.
| Issuer |
|
Mangoceuticals Inc. |
| |
|
|
| Common stock to be offered by the selling stockholders |
|
The selling stockholders are offering up to an aggregate of 4,461,718 shares of Common Stock. |
| |
|
|
| Common stock outstanding prior to this offering (1) |
|
9,884,477 shares of Common Stock. |
| |
|
|
| Common stock to be outstanding after the offering (1) |
|
14,346,195 shares of Common Stock if all the Warrants are exercised in full and the 650 shares
of Series B Preferred Stock and the Note are converted in full. |
| |
|
|
| Use of proceeds |
|
We will not receive any proceeds from the sale of Common Stock by the selling stockholders. All of the net proceeds from the sale of shares of our Common Stock will go to the selling stockholders as described below in the sections entitled “Selling Stockholders” and “Plan of Distribution”. We have agreed to bear the expenses relating to the registration of the shares of Common Stock for the selling stockholders. Any proceeds received by the Company from the sale of shares of Common Stock from the exercise of the Warrants will be used for general working capital. |
| |
|
|
| Risk factors |
|
Investing in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in the “Risk Factors” section beginning on page 32 before deciding to invest in our securities. |
The number of shares of common
stock to be outstanding after this offering is based on 9,884,477 shares outstanding as of May 27, 2025 and excludes:
| ● |
exercise of outstanding options to purchase
60,000 shares of common stock at an exercise price of $16.50 per share; |
| |
|
| ● |
exercise of outstanding options to purchase 83,333 shares of common stock at an exercise price of $4.80 per share; |
| |
|
| ● |
exercise of outstanding options to purchase 13,333 shares of common stock at an exercise price of $5.55 per share; |
| |
|
| ● |
exercise of outstanding warrants to purchase 92,333 shares of common stock at a weighted average exercise price of $16.61 per share; and |
| |
|
| ● |
future awards under our 2022 Equity Incentive Plan. |
Summary Financial Data
The
following table set forth, for the periods and as of the dates indicated, our summary consolidated financial information. This information
should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and our consolidated financial statements, including the notes thereto, incorporated by reference
herein. Our consolidated financial statements are prepared and presented in accordance with GAAP. Our historical results do not necessarily
indicate results expected for any future periods.
Mangoceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations
| | |
For The Year | | |
For The Year | |
| | |
Ended | | |
Ended | |
| | |
December 31, 2024 | | |
December 31, 2023 | |
| | |
| | |
| |
| Revenues | |
| | | |
| | |
| Revenues | |
$ | 615,873 | | |
$ | 731,493 | |
| Cost of revenues | |
| 93,296 | | |
| 154,900 | |
| Cost of revenues - related party | |
| 142,613 | | |
| 145,092 | |
| Gross profit | |
| 379,964 | | |
| 431,501 | |
| | |
| | | |
| | |
| Operating expenses | |
| | | |
| | |
| General and administrative expenses | |
| 3,000,571 | | |
| 3,319,417 | |
| Salary and benefits | |
| 1,063,781 | | |
| 977,890 | |
| Advertising and marketing | |
| 1,478,663 | | |
| 2,097,505 | |
| Investor relations | |
| 453,749 | | |
| 1,100,465 | |
| Stock based compensation | |
| 2,355,193 | | |
| 2,155,114 | |
| Total operating expenses | |
| 8,351,957 | | |
| 9,650,391 | |
| | |
| | | |
| | |
| Loss from operations | |
| (7,971,993 | ) | |
| (9,218,890 | ) |
| | |
| | | |
| | |
| Other expense | |
| | | |
| | |
| Interest expense | |
| 13,700 | | |
| - | |
| Imputed interest - related party | |
| - | | |
| (6,473 | ) |
| Amortization of intangible assets | |
| 721,533 | | |
| - | |
| Total other expense | |
| 735,233 | | |
| (6,473 | ) |
| | |
| | | |
| | |
| Loss before income taxes | |
| (8,707,226 | ) | |
| (9,212,417 | ) |
| | |
| | | |
| | |
| Income taxes | |
| - | | |
| - | |
| | |
| | | |
| | |
| Net loss | |
| (8,707,226 | ) | |
| (9,212,417 | ) |
| | |
| | | |
| | |
| Net loss attributed to non-controlling interest | |
| (1,081 | ) | |
| - | |
| | |
| | | |
| | |
| Net loss attributed to Mangoceuticals, Inc. | |
$ | (8,706,145 | ) | |
$ | (9,212,417 | ) |
| | |
| | | |
| | |
| Basic and diluted loss per share | |
| | | |
| | |
| Basic and diluted loss per share | |
$ | (4.84 | ) | |
$ | (8.58 | ) |
| | |
| | | |
| | |
| Weighted average number of shares outstanding | |
| | | |
| | |
| Basic and diluted* | |
| 1,978,966 | | |
| 1,074,202 | |
| * | Shares and per share amount have been retroactively adjusted
to reflect the decreased number of shares resulting from a 1 for 15 reverse stock split that was effected in October 2024. |
RISK FACTORS
Investing
in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risk factors
described herein, together with all of the other information appearing herein, before deciding whether to purchase any of the Company’s
stock. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading
price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. Please also read carefully
the section titled “Cautionary Statement Regarding Forward-Looking Statements” contained elsewhere in this prospectus.
Our business is subject to
numerous risks and uncertainties, including those described below and elsewhere in this prospectus. These risks include, but are not limited
to, the following:
| ● |
Our need for additional funding, the availability and terms of such funding, and dilution caused thereby; |
| |
|
| ● |
We have a limited operating history, have produced only a limited amount of products and have generated only limited revenues to date; |
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|
| ● |
Our ability to execute our growth strategy and scale our operations and risks associated with such growth, and our ability to attract members and customers; |
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|
| ● |
The effect of pandemics and governmental responses thereto on our operations, those of our vendors, our customers and the economy in general; |
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|
| ● |
Risks associated with our ED product which has not been, and will not be, approved by the FDA and has not had the benefit of the FDA’s clinical trial protocol which seeks to prevent the possibility of serious patient injury and death; |
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|
| ● |
Risks that the FDA may determine that the compounding of our planned products does not fall within the exemption from the FFDCA Act provided by Section 503A; |
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|
| ● |
Our significant reliance on related party transactions and risks associated with such related party relationships and agreements; |
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|
| ● |
The effect of data security breaches, malicious code and/or hackers; |
| |
|
| ● |
Competition and our ability to create a well-known brand name; |
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|
| ● |
Changes in consumer tastes and preferences; |
| |
|
| ● |
Material changes and/or terminations of our relationships with key parties; |
| ● |
Significant product returns from customers, product liability, recalls and litigation associated with tainted products or products found to cause health issues; |
| |
|
| ● |
Our ability to innovate, expand our offerings and compete against competitors which may have greater resources; |
| |
|
| ● |
Our Chairman and Chief Executive Officer, Jacob D. Cohen, has significant voting control over the company which may deter some investors; |
| |
|
| ● |
Our ability to prevent credit card and payment fraud; |
| |
|
| ● |
Risks associated with inflation, and increases in interest rates and economic downturns, including potential recessions, as well as macroeconomic, geopolitical, health and industry trends, pandemics, acts of war (including the ongoing Ukraine/Russian conflict and Israel/Hamas conflict) and other large-scale crises; |
| |
|
| ● |
The risk of unauthorized access to confidential information; |
| |
|
| ● |
Our ability to protect our intellectual property and trade secrets, claims from third-parties that we have violated their intellectual property or trade secrets and potential lawsuits in connection therewith; |
| |
|
| ● |
Our and our providers’ ability to comply with government regulations, changing regulations and laws, penalties associated with any non-compliance (inadvertent or otherwise), the effect of new laws or regulations, and our ability to comply with such new laws or regulations; |
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|
| ● |
Our reliance on our current management and the terms of their employment agreements with us; |
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|
| ● |
The outcome of future lawsuits, litigation, regulatory matters or claims; |
| |
|
| ● |
The fact that certain recent initial public offerings of companies with public floats comparable to the public float of the Company have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company; and the fact that we may experience similar volatility, which may make it difficult for investors to assess the value of our common stock; |
| |
|
| ● |
Certain terms and provisions of our governing documents which may prevent a change of control, and which provide for indemnification of officers and directors, limit the liability of officers or directors, and provide for the board of director’s ability to issue blank check preferred stock; and |
| |
|
| ● |
The volatile nature of the trading price of our common stock; dilution experienced by investors in the offering; and dilution which may be caused by future sales of securities. |
Risks Related to our Operating History and Need
for Funding
We have a limited
operating history and have generated only limited revenues to date and there is no assurance that we can generate revenues or sell any
commercial amount of our products in the future. We will need to raise additional funding to support our operations in the future.
We have a limited operating
history. We launched our website in mid-November 2022 and have not sold sufficient quantities of our PRIME and/or Compounded Products
to date to support our operations. There is no assurance that we can generate revenues sufficient to support our operations, and even
if additional revenues are generated, there is no assurance that we can generate sufficient net income to support our operations. As reflected
in the accompanying financials, the Company had a net loss of $8,707,226 for the year ended December 31, 2024 and an accumulated deficit
of $20,806,595 as of December 31, 2024. Additionally, the Company had a net loss of $9,212,417 for the year ended December 31, 2023, and
an accumulated deficit of $11,228,173 as of December 31, 2023.
We have experienced recurring
net losses since inception. We believe that we will continue to incur substantial operating expenses in the foreseeable future as we
continue to invest to market our PRIME and Compounded Products, expand product offerings and enhance technology and infrastructure and
further invest into, develop and market our recently acquired intellectual properties, including our patented respiratory illness
prevention technology and Dermytol. These efforts may prove more expensive than we anticipate, and we may not succeed in generating
commercial revenues or net income to offset these expenses. Accordingly, we may not be able to achieve profitability, and we may incur
significant losses for the foreseeable future. Our independent registered public accounting firm included an explanatory paragraph in
its report on our consolidated financial statements as of December 31, 2024, incorporated by reference
herein. As of May 27, 2025, our current capital resources, combined with the net proceeds from recent offerings are not
expected to be sufficient for us to fund operations for the next 12 months. We will need funding in the future however to support
our operations. We may also seek to acquire additional businesses or assets in the future, which may require us to raise funding. We
currently anticipate such funding, if required, being raised through the offering of debt or equity. Such additional financing may not
be available on favorable terms, if at all. If debt financing is available and obtained, our interest expense may increase and we may
be subject to the risk of default, depending on the terms of such financing. If equity financing is available and obtained it may result
in our shareholders experiencing significant dilution. If such financing is unavailable, we may be forced to curtail our business plan,
which may cause the value of our securities to decline in value.
Since we have a limited
operating history, it is difficult for potential investors to evaluate our business and our business is in a relatively new consumer product
segment, which is difficult to forecast.
Our limited operating history
in the health and wellness industry may hinder our ability to successfully meet our objectives and makes it difficult for potential investors
to evaluate our business or prospective operations. As an early-stage company, we are subject to all the risks inherent in the financing,
expenditures, operations, regulatory compliance, complications and delays inherent in a new business. Accordingly, our business and success
face risks from uncertainties faced by developing companies in a competitive environment. The likelihood of our success must be considered
in light of the problems, expenses, difficulties, regulatory challenges, complications and delays frequently encountered in connection
with the formation of a new business, the development of a new strategy and the competitive environment in which we operate. There can
be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.
Additionally, our industry
segment is relatively new, and is constantly evolving. As a result, there is a lack of available information with which to forecast industry
trends or patterns. There is no assurance that sustainable industry trends or preferences will develop that will lead to predictable growth
or earnings forecasts for individual companies or the industry segment as a whole. We are also unable to determine what impact future
governmental regulation may have on trends and preferences or patterns within our industry segment.
We need additional capital
which may not be available on commercially acceptable terms, if at all, and this raises questions about our ability to continue as a going
concern.
We need additional capital
to support our operations and continue to market and commercialize our current Mango ED and Mango GROW products. We may also require additional
funding in the future to support our operations, expand our product line, pay expenses, or expand or complete acquisitions. The most likely
source of future funds presently available to us will be through the sale of equity capital or debt. Any sale of equity or convertible
equity or debt will result in dilution to existing shareholders. Furthermore, we may incur debt in the future, and may not have sufficient
funds to repay our future indebtedness or may default on our future debts, jeopardizing our business viability.
We may not be able to borrow
or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to expand our operations and
business, which might result in the value of our securities decreasing in value or becoming worthless. Additional financing may not be
available to us on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans. Obtaining
additional financing contains risks, including:
| ● |
additional equity financing may not be available to us on satisfactory terms and any equity or convertible equity or debt we are able to issue could lead to dilution for current shareholders; |
| ● |
loans or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants and control or revocation provisions, which are not acceptable to management or our directors; |
| |
|
| ● |
the current environment in capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt financing; and |
| |
|
| ● |
if we fail to obtain required additional financing to commercialize our products and grow our business, we would need to delay or scale back our business plan, reduce our operating costs, or delay product launches, each of which would have a material adverse effect on our business, future prospects, and financial condition. |
Additionally, we may have
difficulty obtaining additional funding, and we may have to accept terms that would adversely affect our shareholders. For example, the
terms of any future financings may impose restrictions on our right to declare dividends (provided that none are currently planned) or
on the manner in which we conduct our business. Additionally, lending institutions or private investors may impose restrictions on a future
decision by us to make capital expenditures, acquisitions or significant asset sales. If we are unable to raise additional funds, we may
be forced to curtail or even abandon our business plan.
Risks Related to Our Business Activities
We may not be able to
successfully commercialize our Mango ED or Mango GROW products or any other potential future men’s wellness products.
We may not be able to effectively
commercialize our Pharmaceutical Products or any other potential future men’s wellness products. If we are unable to successfully
commercialize our Mango ED and Mango GROW products or successfully develop, produce, launch and commercialize any other potential future
men’s wellness products, our ability to generate product sales will be severely limited, which will have a material adverse impact
on our business, financial condition, and results of operations.
We expect to face
intense competition, often from companies with greater resources and experience than we have.
The health, wellness, and
telemedicine industries are highly competitive and subject to rapid change. The industries continue to expand and evolve as an increasing
number of competitors and potential competitors enter the market. Many of these competitors and potential competitors have substantially
greater financial, technological, managerial and research and development resources and experience than we have. We mainly compete with
other companies offering men’s wellness products, including Hims & Hers Health, Inc. and Roman, and with our Mango ED products,
we are also competing against much larger pharmaceutical companies who offer ED branded drugs like Viagra (Pfizer) and Cialis (marketed
by Lilly ICOS LLC, a joint venture between Eli Lilly and Company and ICOS Corporation) and their generic forms. With our Mango GROW product,
we compete against the much larger pharmaceutical company Merck & Co., which offers the branded hair loss product Propecia, and Johnson
& Johnson, the owner of Rogaine® - a branded form of Minoxidil. The majority of these competitors and potential competitors have
more experience than we have in the development of health and wellness services and products. In addition, our planned services and products
will compete with service and product offerings from large and well-established companies that have greater marketing and sales experience
and capabilities than we or the parties with which we contract have. If we are unable to compete successfully, we may be unable to grow
and sustain our revenue.
We believe that our ability
to compete depends upon many factors both within and beyond our control, including:
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our marketing efforts; |
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the flexibility and variety of our product offerings relative to our competitors, and our ability to timely launch new product initiatives; |
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the quality and price of products offered by us and our competitors; |
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our reputation and brand strength relative to our competitors; |
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customer satisfaction; |
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the size and composition of our customer base; |
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the convenience of the experience that we provide; |
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our ability to comply with, and manage the costs of complying with, laws and regulations applicable to our business; and |
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our ability to cost-effectively source and distribute the products we offer and to manage our operation. |
Many competitors also have
longer operating histories, and will have larger fulfillment infrastructures, greater technical capabilities, faster shipping times, lower-cost
shipping, lower operating costs, greater financial, marketing, institutional and other resources and larger consumer bases than we do.
These factors may also allow our competitors to derive greater revenue and profits from their existing consumer bases, acquire consumers
at lower costs or respond more quickly than we are able to, to new or emerging technologies and changes in product trends and consumer
shopping behavior. These competitors may engage in more extensive research and development efforts, enter or expand their presence in
any or all of the ecommerce or retail channels where we compete, undertake more far-reaching marketing campaigns, and adopt more aggressive
pricing policies, which may allow them to build larger consumer bases or generate revenue from their existing consumer bases more effectively
than we are able to. As a result, these competitors may be able to offer comparable or substitute products to consumers at similar or
lower costs. This could put pressure on us to lower our prices, resulting in lower revenue and margins or cause us to lose market share
even if we lower prices.
Furthermore, companies with
greater resources or more well-known brand names may attempt to compete with us, and as a result, we may lose current or potential customers
and may be unable to generate sufficient revenues to support our operations, any one of which could have a material adverse effect on
our ability to grow and our results of operations.
We may not successfully compete
with larger competitors that have greater financial, sales, technical and other resources. Companies with greater resources may acquire
our competitors or launch new products, and they may be able to use their resources and scale to respond to competitive pressures and
changes in consumer preferences by reducing prices or increasing promotional activities, among other things.
We face, and may continue
to face, intellectual property infringement or misappropriation, and other claims that could be costly to defend, result in significant
damage awards or other costs (including indemnification awards), and limit our ability to sell certain products.
We are currently party to,
and may in the future continue to be party to, litigation based on allegations of infringement or other violations of intellectual property
rights, including patent, copyright, trade secrets, and trademarks. Adverse results in any of these lawsuits may include awards of monetary
damages, costly royalty or licensing agreements (if licenses are available at all), or orders limiting our ability to sell our products
in the U.S. or elsewhere, including by preventing us from selling some or all of our Compounded Products. They may also cause us to change
our business practices in ways that could result in a loss of revenues for us and otherwise harm our business. Some of our agreements
with our partners require us to defend against certain intellectual property infringement claims and in some cases indemnify them for
certain intellectual property infringement claims against them, which could result in increased costs for defending such claims or significant
damages if there was an adverse ruling in any such claims. Regardless of their merits, intellectual property claims are often time consuming
and expensive to litigate or settle. To the extent such claims are successful, they could harm our business, including our product offerings,
financial condition, and operating results. In the event we were prohibited from selling certain, or all of our Compounded Products, and/or
were forced to pay significant damages, we may be forced to curtail our business operations and seek bankruptcy protection.
We may enter into strategic
transactions in the future which may result in a material change in our operations and/or a change of control.
The costs and expenses of
our public reporting obligations are material, and materially affect our quarterly results of operations and profitability. The Company
has recently initiated a formal review process to evaluate strategic alternatives for the Company. The Board of Directors and management
team are committed to acting in the best interests of the Company, its stockholders and its stakeholders. There is no deadline or definitive
timetable set for completion of the strategic alternatives review process and there can be no assurance that this process will result
in the Company pursuing a transaction or any other strategic outcome. Transactions which may be undertaken by the Company, may include,
but are not limited to, business combinations, liquidations of assets and/or a sale of the Company or its assets. The Company does not
intend to make any further public comment regarding the review of strategic alternatives until it has been completed or the Company determines
that a disclosure is required by law or otherwise deemed appropriate.
As a result of the above,
in the future, we or our majority stockholders, may enter into transactions with parties seeking to merge and/or acquire us and/or our
operations. While we have not entered into any agreements or understandings with any such parties to date, in the event that we do enter
into such a transaction or transactions in the future, our majority stockholder(s) will likely change and new shares of common stock or
preferred stock could be issued resulting in substantial dilution to our then current stockholders. As a result, our new majority stockholders
may change the composition of our Board of Directors and may replace our current management. Any future transaction may also result in
a change in our business focus. We have not entered into any agreements relating to any strategic transaction involving the Company as
of the date of this filing and may not enter into such agreements in the future. Any future strategic transaction involving the Company
or its operations may have a material effect on our operations, cash flows, results of operations, prospects, plan of operations, the
listing of our common stock on Nasdaq, our officers, directors and majority stockholder(s), and the value of our securities.
If we fail to successfully
provide a good customer experience, including by developing new product offerings, our ability to attract members and customers may be
materially adversely affected.
Our ability to obtain customers
and retain future customers, attract customers and increase customer engagement with us will depend in part on our ability to successfully
implement and improve our customer experience, including by continuing to create and introduce new product offerings, improving upon and
enhancing our existing product offerings and strengthening our customers interactions with our brand and products. If new or enhanced
product offerings are unsuccessful, we may be unable to attract or retain customers and our operating results could be materially adversely
affected. Furthermore, new or shifting customer demands, tastes or interests, superior competitive offerings or a deterioration in our
product offering quality or our ability to bring new or enhanced product offerings to market quickly and efficiently could negatively
affect the attractiveness of our products and the economics of our business and require us to make substantial changes to and additional
investments in our product offerings or business model.
Counterfeit versions
of our products could harm our customers and have a negative impact on our revenues, earnings, reputation and business.
Our industry is subject to
illegal counterfeiting and the presence of counterfeit products in certain of our markets and over the Internet. Third parties may illegally
distribute and sell counterfeit versions of our products, which do not meet our manufacturing and testing standards, and which contain
varying ingredients. To customers counterfeit products may be visually indistinguishable from the authentic version. Counterfeit products
pose a risk to customer health and safety because of the conditions under which they are manufactured as well as the lack of regulation
of their ingredients. The sale of counterfeit products could adversely impact our business and reputation by impacting customer confidence
in our authentic products, potentially resulting in lost sales, product recalls, and an increased threat of litigation.
We may expend our
limited resources to pursue particular products or services and may fail to capitalize on products or services that may be more profitable
or for which there is a greater likelihood of success.
Because we have limited financial
and managerial resources, we must focus our efforts on particular service programs and products. As a result, we may forego or delay pursuit
of opportunities with other services or products that later prove to have greater commercial potential. Our resource allocation decisions
may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Any such failure could result in
missed opportunities and/or our focus on products or services with low market potential, which would harm our business and financial condition.
Our current use of proceeds is specifically focused on among other things, the marketing and selling of our current Mango ED and Mango
GROW products and includes capital allocated for future products or services anticipated to be sold in the future under the ‘Mango’
label and brand.
We have entered into
a Master Services Agreement and Statement of Work with Epiq Scripts, LLC, a related party, which entity is currently licensed to provide
pharmacy services in 49 states and the District of Columbia.
As described in greater detail
under “Our Related Party Pharmacy” Epiq Scripts is currently fully licensed with the Texas State Board of Pharmacy and further
has State Board of Pharmacy (or its equivalent) licenses from the District of Columbia and all other states except for Alabama (Epiq Scripts
intends to obtain a state license from Alabama by the end of the second quarter of 2025). Epiq Scripts has obtained
its National Provider Identifier (“NPI”) number and is now a member of the National Council for Prescription Drug Programs
(“NCPDP”), a standards development organization. Additionally, Epiq Scripts has applied for the highest level
of accreditation with the Utilization Review Accreditation Commission (“URAC”), a
Washington DC-based healthcare accrediting organization that establishes quality standards for the entire healthcare industry.
Although Epiq Scripts is physically located in Texas, it can ship products to customers in all states (except Alabama).
The Master Services Agreement does not address
product liability claims which may result in us bringing legal claims or actions against Epiq Scripts to attempt to seek indemnification
or contribution for product liability claims.
Each party to the Master Services Agreement agreed
to indemnify, defend, and hold harmless the other and the other party’s officers, directors, shareholders, employees, and agents
from and against any and all nonparty claims, or actions for damages, liabilities (including strict liability), penalties, costs and expenses
(including reasonable legal fees, expenses and costs) to the proportionate extent caused by (1) the negligence or willful misconduct of
the indemnitor or any of its employees or agents in connection with the performance of the agreement, or (2) any breach of any representation,
warranty or covenant under the agreement by the indemnitor or any of its employees or agents. Additionally, the parties agreed that neither
party will be liable to the other for special, incidental, or exemplary damages, subject to certain limited exceptions. The Master Services
Agreement does not address product liability claims or assign any rights of indemnification or contribution in connection therewith. As
a result, in the event of product liability claims, we may be forced to bring legal claims or actions against Epiq Scripts to attempt
to seek indemnification or contribution for product liability claims, to the extent that we are sued in connection with such claims and
Epiq Scripts isn’t sued or that we are found primarily liable for such claims. Such claims may be costly, time consuming, and may
not ultimately result in a favorable outcome to us, all of which may have an adverse effect on the value of our securities.
We currently owe certain rights to Epic
Scrips under the Management Services Agreement which may limit our future operations and/or have a material adverse effect on our operations
and cash flow.
Pursuant to the Master Services Agreement and
a related SOW, Epiq Scripts agreed to provide pharmacy and related services to us, we agreed to exclusively use Epiq Scripts as the provider
of online fulfillment, specialty compounding, packaging, shipping, dispensing and distribution services relating to products sold exclusively
via our website, that may be prescribed as part of a telehealth consultation on our platform, during the term of the Master Services Agreement,
so long as Epiq Scripts complies with the terms of the Master Services Agreement. The agreement also includes a 30-day right of first
refusal for Epiq Scripts to provide pharmacy services for any new product that Mango may introduce during the term of the Master Services
Agreement.
Pursuant to the Master Services Agreement, as
amended, Epiq Scripts has certain rights in the event that the Company seeks to obtain pharmaceutical services in connection with certain
Company products in jurisdictions other than the United States, including, without limitation, Mexico and the United Kingdom, where Epiq
Scripts does not currently maintain licenses or permits and/or to terminate Epiq Scripts’ rights to provide exclusive Pharmaceutical
Services in any current state of the United States or Future Jurisdiction where Epiq Scripts may then be providing Pharmaceutical Services
to the Company.
Specifically, should the Company decide to transfer
any services provided by Epiq Scripts in a Current Jurisdiction to another pharmaceutical service provider, the Company will be required
to pay Epiq Scripts a fee of 1% of the total gross sales of all Prescription Products (defined below) by the Company resulting from the
Transferred Services in the Current Jurisdiction, for a period of the lesser of (a) five (5) years from the date the Company transferred
the Transferred Services; and (b) through the end of the term of the Master Services Agreement (including where applicable, any renewal
term). The Non-Use Fee is payable monthly in arrears, for calendar quarters, by the 15th day following the end of each calendar quarter.
Notwithstanding the above, the Non-Use Fee shall
not apply, and the Company shall not be obligated to pay any Non-Use Fee (a) in the event that the Transferred Services are provided directly
by the Company or a majority-owned subsidiary of the Company; (b) in the event the Company decides to enter into an agreement with another
pharmaceutical service provider to provide Pharmaceutical Services in a Future Jurisdiction; or (c) in connection with any services provided
by any parties in any Future Jurisdictions.
Pursuant to the Master Services Agreement, as
amended, until September 15, 2028, the Company is required to notify Epiq Scripts in writing of any plans to (a) expand its need for pharmacy
services outside of those contemplated by the Master Services Agreement; (b) expand its need for pharmacy services into a new jurisdiction
which Epiq Scripts does not then operate in (including, but not limited to new countries); or (c) begin providing pharmacy services internally
(either through organic growth or acquisition). Thereafter Epiq Scripts has the right to provide the Company written notice of its intention
to provide such services (as described in (a) or (b) above, whereafter the Company is required to discuss and negotiate such services
in good faith with Epiq Scripts for a period of not less than 15 days). Otherwise, in the event of the occurrence of an event discussed
in (c) above, the Company is required to discuss the possibility of Epiq Scripts either co-operating the pharmacy or providing management
services to the Company in good faith for 15 days. In the event after such 15 day period, the Company and Epiq Scripts cannot come to
a mutually agreeable agreement, the Company is under no further obligation regarding the matter set forth in the notice provided to Epiq
Scripts.
The rights and obligations set forth above could
have a material adverse effect on the Company, its plans for future products and expansions, or make such future products or expansion
more costly or time consuming.
We currently exclusively
rely, and continue to exclusively rely, on Epiq Scripts, a related party entity with a limited operating history, for our pharmacy compounding
services.
Epiq Scripts was only formed
in January 2022 and has only been compounding drugs for patients for a short period of time. We currently exclusively rely, and continue
to exclusively rely, on Epiq Scripts. We face risks relying on a newly formed pharmacy with limited operations. Those risks include risks
that Epiq Scripts will not be able to follow applicable regulatory guidelines relating to, will not be able to timely or cost effectively
complete, or may not correctly, fulfill, specialty compound, package, ship, dispense and/or distribute our Mango ED and Mango GROW products.
If Epiq Scripts is not able to scale its operations to meet the demand of our operations, or is unable to undertake any of the actions
described above, our business may be materially and adversely affected, we may need to find a new partner pharmacy, which may charge us
more money for its services or may not have as favorable contract terms, we may be delayed or prevented from selling our Mango ED and
Mango GROW products, and may face fines, penalties or litigation. In the event of the occurrence of any of the above, the value of our
securities may decline in value or become worthless.
The use of social media
and influencers may materially and adversely affect our reputation or subject us to fines or other penalties.
We use third-party social
media platforms as part of our marketing strategy. We also maintain relationships with social media influencers. As existing e-commerce
and social media platforms continue to rapidly evolve and new platforms develop, we expect to maintain a presence on these existing platforms
and expect them to be an important part of our marketing strategy. If we are unable to cost-effectively use social media platforms as
marketing tools, if the social media platforms we use change their policies or algorithms, or if evolving laws and regulations limit how
we can market through these channels, if at all, we may not be able to fully optimize our use of such platforms and our ability to retain
current customers and acquire new customers may suffer. Any such failure could adversely affect our reputation, revenue, and results of
operations.
In addition, an increase in
the use of social media for product promotion and marketing may increase the burden on us to monitor compliance related thereto, and increase
the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations. For example,
in some cases, the Federal Trade Commission has sought enforcement action where an endorsement has failed to clearly and conspicuously
disclose a financial relationship or material connection between an influencer and an advertiser. We do not control the content of what
our influencers post on social media, and if we were held responsible for any false, misleading, or otherwise unlawful content of their
posts or their actions, we could be fined or subjected to other monetary liabilities or required to alter our practices, which could have
an adverse impact on our business, reputation, cash flows and ability to operate.
Negative commentary regarding
our business, or influencers who endorse our products and other third parties who are affiliated with or endorse us, may also be posted
on social media platforms. Influencers with whom we maintain endorsement arrangements could engage in behavior or use their platforms
to communicate with our customers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect
our reputation. Any such negative commentary could impact our reputation or brand and affect our ability to attract and retain customers,
which could have a material adverse effect on our business and results of operations.
Our business depends
on our brand, and any failure to maintain, protect or enhance our brand, including as a result of events outside our control, could materially
adversely affect our business.
We believe our future success
depends on our ability to maintain and grow the value of the “Mango” brand. Maintaining, promoting and positioning our brand
and reputation will depend on, among other factors, the success of our marketing and merchandising efforts and our ability to provide
a consistent, high-quality customer experience. Any negative publicity, regardless of its accuracy, could materially adversely affect
our business. Brand value is based in large part on perceptions of subjective qualities, and any incident that erodes the loyalty of our
customers, including adverse publicity or a governmental investigation or litigation, could significantly reduce the value of our brand
and significantly damage our business.
The value of our brand also
depends on effective customer support to provide a high-quality customer experience, which requires significant personnel expense. If
not managed properly, this expense could impact our profitability. Failure to manage or train our own or outsourced customer support representatives
properly, or our inability to hire sufficient customer support representatives could result in lower-quality customer support and/or increased
customer response times, compromising our ability to handle customer complaints effectively.
Our ability to gain
and increase market acceptance and generate commercial revenues is subject to a variety of risks, many of which are out of our control.
Our Pharmaceutical Products
and our future men’s wellness products may not gain or increase market acceptance among physicians, patients, healthcare payors
or the medical community. We believe that the degree of market acceptance and our ability to generate commercial revenues from such products
will depend on a number of factors, including:
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our ability to expand the use of our products through targeted patient and physician education; |
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competition and timing of market introduction of competitive products; |
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quality, safety and efficacy in the approved setting; |
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prevalence and severity of any side effects, including those of the components of our products; |
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emergence of previously unknown side effects, including those of the generic components of our products; |
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potential or perceived advantages or disadvantages over alternative treatments; |
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the convenience and ease of purchasing the product, as perceived by potential patients; |
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strength of sales, marketing and distribution support; |
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price, both in absolute terms and relative to alternative treatments; |
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the effectiveness of any future collaborators’ sales and marketing strategies; |
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the effect of current and future healthcare laws; |
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availability of coverage and reimbursement from government and other third-party payors; |
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recommendations for prescribing physicians to complete certain educational programs for prescribing drugs; |
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the willingness of patients to pay out-of-pocket in the absence of government or third-party coverage; and |
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product labeling, product insert, or new studies or trial requirements of the FDA or other regulatory authorities. |
Our Pharmaceutical Products
and/or future products may fail to achieve market acceptance or generate significant revenue to achieve sustainable profitability. In
addition, our efforts to educate the medical community and third-party payors on the safety and benefits of our drugs may require significant
resources and may not be successful.
We may be unable to
scale our operations fast enough to bring down our cost of sales and generate revenues sufficient to support our operations.
We believe that in general,
the faster we are able to scale up our operations, the lower our cost of sales, as a percentage of revenue, will be, as we believe that
certain economies of scale exist with our operations. If we are unable to grow our business fast enough to take advantage of these economies
of scale, our operations may suffer, and we may not be profitable.
Economic downturns or
a change in consumer preferences, perception and spending habits could limit consumer demand for our products and negatively affect our
future business.
The products that we sell
and plan to sell in the future (including our Mango ED and Mango GROW products) may be adversely affected from time to time by economic
downturns that impact consumer spending, including discretionary spending. Future economic conditions such as employment levels, business
conditions, housing starts, market volatility, interest rates, inflation rates, energy and fuel costs and tax rates, or our actions in
response to these conditions, such as price increases, could reduce consumer spending or change consumer purchasing habits.
Our performance depends significantly
on factors that may affect the level and pattern of consumer spending in the markets in which we operate. Such factors include consumer
preference, consumer confidence, consumer income, consumer perception of the safety and quality of our future products and shifts in the
perceived value for our products relative to alternatives. A general decline in the consumption of our future products could occur at
any time as a result of change in consumer preference, perception, confidence and spending habits, including an unwillingness to pay a
premium or an inability to purchase our products due to financial hardship or increased price sensitivity, which may be exacerbated by
inflationary pressures, interest rates, and economic uncertainty. If consumer preferences shift away from our products, our business,
financial condition and results of operations could be adversely affected.
The success of our products
depends on a number of factors including our ability to accurately anticipate changes in market demand and consumer preferences, our ability
to differentiate the quality of our future products from those of our competitors, and the effectiveness of our marketing and advertising
campaigns for our products. We may not be successful in identifying trends in consumer preferences and developing products that respond
to such trends in a timely manner. We also may not be able to effectively promote our products by our marketing and advertising campaigns
and gain market acceptance. If our products fail to gain market acceptance, are restricted by regulatory requirements or have quality
problems, we may not be able to fully recover costs and expenses incurred in our operation, and our business, financial condition, results
of operations and prospects could be adversely affected.
We rely upon independent
third-party transportation providers for all of our product shipments and are subject to increased shipping costs as well as the potential
inability of our third-party transportation providers to deliver on a timely basis.
We rely upon independent third-party
transportation providers for all of our product shipments, including shipments from our related party pharmacy to our customers. Our utilization
of these third-party delivery services for shipments is subject to risks which may impact a shipping company’s ability to provide
delivery services that adequately meet our shipping needs, including risks related to employee strikes, labor and capacity constraints,
port security considerations, trade policy changes or restrictions, military conflicts, acts of terrorism, accidents, natural disasters
and inclement weather. Any interruption in service provided by our shipping companies could cause temporary disruptions in our business,
a loss of sales and profits, and other material adverse effects. In addition, we are subject to increased shipping costs when fuel prices
increase, as we use expedited means of transportation such as air freight. If we change the shipping company we use, we could face logistical
difficulties that could adversely affect deliveries, and we would incur costs and expend resources in connection with such change.
The failure of our
Telemedicine Providers to attract and retain physicians in a competitive labor market could limit our ability to execute our growth strategy,
resulting in a slower rate of growth.
The success of our wellness
business will depend on the ability of out Telemedicine Providers and any future contracted telemedicine services provider(s) to continue
to recruit and retain a sufficient number of qualified licensed doctors. Although we believe such provider(s) will have an effective recruitment
process, there is no assurance that such provider(s) will be able to secure arrangements with sufficient numbers of licensed doctors or
retain the services of such practitioners. If our Telemedicine Providers or any provider(s) we engage in the future, experience delays
or shortages in obtaining access to qualified physicians, we would be unable to operate and may be forced to seek alternative arrangements
which could be more costly or may be forced to suspend our business operations.
Our business could
be adversely affected if physicians were classified as employees of the Telemedicine Providers instead of independent contractors.
Our Telemedicine Providers
typically engage physicians that perform services through our platform as independent contractors. The Telemedicine Providers believe
that the physicians are independent contractors because, among other things, they can choose whether, when, and where to provide services
on our platform and are free to provide services on our competitors’ platforms. Nevertheless, recent legislative and judicial activity
have in some jurisdictions created more restrictive standards or enforcement uncertainty with respect to the classification of workers
within certain industries. The Telemedicine Providers may not be successful in defending the independent contractor status of physicians
in some or all jurisdictions in which we and/or they operate. Furthermore, the costs associated with defending, settling, or resolving
pending and future lawsuits (including demands for arbitration) relating to the independent contractor status of physicians could be material
to the Telemedicine Providers. Foreign, state, and local laws governing the definition or classification of independent contractors, or
changes thereto, or judicial decisions regarding independent contractor classification, could require classification of physicians as
employees (or workers or quasi-employees where those statuses exist) of the Telemedicine Providers. If the Telemedicine Providers are
required to classify physicians as employees (or as workers or quasi-employees where applicable), it could result in significant additional
expenses, potentially including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and
meal and rest period requirements), employee benefits, social security contributions, taxes, and penalties. Further, any such reclassification
could add significant complexity to our business model and could force us to have to modify or renegotiate our relationships with the
Telemedicine Providers, which may not be possible on mutually agreeable terms, and could have an adverse effect on our business, financial
condition, and results of operations.
Disruption in our
global supply chain could negatively impact our business.
The compounds found in the
products we sell are sourced from a wide variety of vendors, and any future disruption in our supply chain or inability to find qualified
vendors and access compounds that meet requisite quality and safety standards in a timely and efficient manner could adversely impact
our business. While we have not experienced material supply chain issues to date, the loss or disruption of such supply arrangements for
any reason, including as a result of ongoing conflict arising out of the Russian invasion of Ukraine and the hostilities and conflict
in the Middle East, other acts of war or terrorism, trade sanctions, inflation, tariffs, health epidemics or pandemics, labor disputes,
loss or impairment of key manufacturing sites, inability to procure sufficient raw materials, quality control issues, ethical sourcing
issues, a supplier’s financial distress, natural disasters, looting or other external factors over which we have no control, could
interrupt product supply and, if not effectively managed and remedied, have a material adverse impact on our business, results of operations
and financial condition.
Additionally, any major
changes in tax or trade policy, such as the imposition of additional tariffs or duties on imported products, or trade sanctions, between
the U.S. and countries from which we or our vendors source merchandise, directly or indirectly, could require us to take certain actions,
such as raising prices on our offerings or seeking alternative sources of supply from vendors with whom we have less familiarity, which
could adversely affect our reputation, revenue, and our results of operations.
If we are unable to
maintain or enter into future agreements with suppliers or our suppliers fail to supply us with our Compounded Products ingredients or
any other potential future men’s wellness products, we may experience delays in selling our products.
We may not be successful in
maintaining or entering into new supply agreements on reasonable terms or at all or that we or our suppliers will be able to obtain or
maintain the necessary regulatory approvals or state and federal controlled substances registrations for current or potential future suppliers
in a timely manner or at all. If we are unable to obtain a sufficient quantity of active pharmaceutical ingredients manufactured at a
facility that is registered and listed with the FDA and required to produce products, there could be a delay in producing products, which
could adversely affect our product sales and operating results materially, which could significantly harm our business. This has not occurred
to date.
We currently do not have any
manufacturing facilities and intend to rely on third parties for the supply of our products (such as Epiq Scripts, which is a related
party), as well as for the supply of materials. However, we cannot be certain that we or our suppliers will be able to obtain or maintain
the necessary regulatory approvals or registrations for these suppliers in a timely manner or at all.
Our business is exposed
to risks associated with credit card and other online payment chargebacks and fraud.
A majority of our revenue
is, and is expected to be, processed through credit cards and other online payments. If we experience refunds or chargebacks, our processors
could require us to create reserves, increase fees or terminate contracts with us, which would have an adverse effect on our financial
condition. Our failure to limit fraudulent transactions conducted on our website, such as through the use of stolen credit card numbers,
could also subject us to liability and adversely impact our reputation. Under credit card association rules, penalties may be imposed
at the discretion of the association for inadequate fraud protection. Any such potential penalties would be imposed on our credit card
processor by the association. However, we face the risk that we may fail to maintain an adequate level of fraud protection and that one
or more credit card associations or other processors may, at any time, assess penalties against us or terminate our ability to accept
credit card payments or other form of online payments from customers, which would have a material adverse effect on our business, financial
condition and operating results.
We could also incur significant
fines or lose our ability to give customers the option of using credit cards to pay for our products if we fail to follow payment card
industry data security standards, even if there is no compromise of customer information. Although we believe that we operate in compliance
with payment card industry data security standards, it is possible that at times we may not be in full compliance with these standards.
Accordingly, we could be fined, which could impact our financial condition, or our ability to accept credit and debit cards as payment
could be suspended, which would cause us to be unable to process payments using credit cards. If we are unable to accept credit card payments,
our business, financial condition and operating results may be adversely affected.
In addition, we could be liable
if there is a breach of the payment information. Online commerce and communications depend on the secure transmission of confidential
information over public networks. We rely on encryption and authentication technology to authenticate and secure the transmission of confidential
information, including cardholder information. However, this technology may not prevent breaches of the systems we use to protect cardholder
information. In addition, some of our contracting parties may also collect or possess information about our customers, and we may be subject
to litigation or our reputation may be harmed if our contracting parties fail to protect our customers’ information or if they use
it in a manner inconsistent with our policies and practices. Data breaches can also occur as a result of non-technical issues. Under contracts
with processors, if there is unauthorized access to, or disclosure of, credit card information we store, we could be liable to the credit
card issuing banks for their cost of issuing new cards and related expenses.
Security breaches, loss
of data and other disruptions could compromise sensitive information related to our business or customers, or prevent us from accessing
critical information and expose us to liability, which could adversely affect our business and our reputation.
In the ordinary course of
our business, we collect, store, use and disclose sensitive data, including health information and other types of personally identifiable
information, or PII. We also process and store, and use additional third parties to process and store, confidential and proprietary information
such as intellectual property and other proprietary business information, including that of our customers, providers and contracting parties.
Security breaches of this
infrastructure, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, and employee or
contractor error, negligence or malfeasance, can create system disruptions, shutdowns or unauthorized disclosure or modifications of information,
causing sensitive, confidential or proprietary information to be accessed or acquired without authorization or to become publicly available.
Because of the nature of the sensitive, confidential and proprietary information that we expect to collect, store, transmit, and otherwise
process, the security of our technology platform and other aspects of our services, including those provided or facilitated by our third-party
service providers, will be important to our operations and business strategy. Measures taken to protect our systems, those of our third-party
service providers, or sensitive, confidential and proprietary information that we or our third-party service providers process or maintain,
may not adequately protect us from the risks associated with the collection, storage and transmission of such information. A security
breach or privacy violation that leads to disclosure or unauthorized use or modification of, or that prevents access to or otherwise impacts
the confidentiality, security, or integrity of, sensitive, confidential, or proprietary information we or our third-party service providers
maintain or otherwise process, could harm our reputation, compel us to comply with breach notification laws, and cause us to incur significant
costs for remediation, fines, penalties, notification to individuals and governmental authorities, implementation of measures intended
to repair or replace systems or technology and to prevent future occurrences, potential increases in insurance premiums, and forensic
security audits or investigations. As a result, a security breach or privacy violation could result in increased costs or loss of revenue.
Any actual or suspected security
breach or other compromise of our security measures or those of our third-party vendors, whether as a result of hacking efforts, denial-of-service
attacks, viruses, malicious software, break-ins, phishing attacks, social engineering or otherwise, could harm our reputation and business,
damage our brand and make it harder to retain existing customers or acquire new ones, require us to expend significant capital and other
resources to address the breach, and result in a violation of applicable laws, regulations or other legal obligations. Our insurance policies
may not cover, or may not be adequate to reimburse us for, losses caused by any such security breach.
We rely on email and other
messaging services to connect with our existing and potential customers. Our customers may be targeted by parties using fraudulent spoofing
and phishing emails to misappropriate passwords, payment information or other personal information or to introduce viruses through Trojan
horse programs or otherwise through our customers’ computers, smartphones, tablets or other devices. Despite our efforts to mitigate
the effectiveness of such malicious email campaigns through product improvements, spoofing and phishing may damage our brand and increase
our costs. Any of these events or circumstances could materially adversely affect our business, financial condition and operating results.
As of the date of this filing,
there have been no such data breaches or other security related issues.
We may experience fluctuations
in our tax obligations and effective tax rate, which could adversely affect our business, results of operations, and financial condition.
We are subject to taxes in
every jurisdiction in which we operate. We record tax expense based on current tax liabilities and our estimates of future tax liabilities,
which may include reserves for estimates of probable settlements of tax audits. At any one-time, multiple tax years are subject to audit
by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement
of these issues. Further, our effective tax rate in a given financial statement period may be materially impacted by changes in tax laws,
changes in the mix and level of earnings by taxing jurisdictions, or changes to existing accounting rules or regulations. Fluctuations
in our tax obligations and effective tax rate could adversely affect our business, results of operations, and financial condition.
If we become subject
to product liability claims, we may be required to pay damages that exceed our insurance coverage, if any.
Our products are subject to
risks for product liability claims due to inherent potential side effects. We may be unable to obtain or maintain product liability coverage.
A product liability claim in excess of, or excluded from, our insurance coverage which currently covers exposure to product liability
claims, both technology products and physical products, would have to be paid out of cash reserves and could have a material adverse effect
upon our business, financial condition and results of operations. Product liability insurance is expensive even with large self-insured
retentions or deductibles, difficult to maintain, and current or increased coverage may not continue to be available on acceptable terms,
if at all.
If we cannot successfully
defend ourselves against a product liability claim, we may incur substantial liabilities. Regardless of merit or eventual outcome, liability
claims may result in:
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injury to our reputation; |
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costs of defending the claim and/or related litigation; |
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cost of any potential adverse verdict; |
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substantial monetary awards to patients or other claimants; and |
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the inability to commercialize our products. |
Damages awarded in a product
liability action could be substantial and could have a negative impact on our financial condition. Whether or not we were ultimately successful
in product liability litigation, such litigation would consume substantial amounts of our financial and managerial resources, and might
result in adverse publicity, all of which would impair our business.
For example, a 2014 study
published in The Journal of the American Medical Association determined that Sildenafil (the active ingredient in Viagra and one of the
ingredients we alternatively use, together with Sildenafil in our Mango ED product) may be associated with a higher risk of developing
melanoma. The study evaluated data from more than 25,000 men who used Sildenafil and found that Sildenafil use was significantly associated
with an increased risk of subsequent melanoma, after considering other risk factors. It is possible that the ingredients we use in our
Mango ED and Mango GROW products or any other products we sell (including our Mango ED product, which is made with Sildenafil as an alternative
to Tadalafil), could be found to result in increases in the likelihood of developing cancer or other diseases, which could subject us
to litigation, penalties or recalls, all of which could have a material adverse effect on our operations and cause the value of our securities
to decline in value or become worthless. Furthermore, our use of Sildenafil in our products could subject us to litigation, penalties
or recalls, all of which could have a material adverse effect on our operations and cause the value of our securities to decline in value
or become worthless.
Disruptions in our data
and information systems could harm our reputation and our ability to run our business.
We rely extensively on data
and information systems for our supply chain, financial reporting, human resources and various other operations, processes and transactions.
Furthermore, a significant portion of the communications between us, our suppliers and customers depend on information technology. Our
data and information systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer
viruses, security breaches (including breaches of our transaction processing or other systems that could result in the compromise of confidential
customer data), catastrophic events, data breaches and usage errors by our employees or third-party service providers. Our data and information
technology systems may also fail to perform as we anticipate, and we may encounter difficulties in adapting these systems to changing
technologies or expanding them to meet the future needs of our business. If our systems are breached, damaged or cease to function properly,
we may have to make significant investments to fix or replace them, suffer interruptions in our operations, incur liability to our customers
and others or face costly litigation, and our reputation with our customers may be harmed. We also rely on third parties for a majority
of our data and information systems, including for third-party hosting and payment processing. If these facilities fail, or if they suffer
a security breach or interruption or degradation of service, a significant amount of our data could be lost or compromised and our ability
to operate our business and deliver our product offerings could be materially impaired. In addition, various third parties, such as our
suppliers and payment processors, also rely heavily on information technology systems, and any failure of these systems could also cause
loss of sales, transactional or other data and significant interruptions to our business. Any material interruption in the data and information
technology systems we rely on, including the data or information technology systems of third parties, could materially adversely affect
our business, financial condition and operating results.
Risks Related to Legal, Regulatory and Government
We incur significant
costs to ensure compliance with U.S. and Nasdaq reporting and corporate governance requirements.
We incur significant costs
associated with our public company reporting requirements and with applicable U.S. and Nasdaq corporate governance requirements, including
requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC and Nasdaq. We expect all of these applicable
rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time-consuming
and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to retain
director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher
costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals
to serve on our Board of Directors or as executive officers.
If we fail to comply
with government laws and regulations it could have a materially adverse effect on our business.
The health care industry
is subject to extensive federal, state and local laws and regulations relating to licensure, conduct of operations, ownership of facilities,
addition of facilities and services, payment for services and prices for services that are extremely complex and for which, in many instances,
the industry does not have the benefit of significant regulatory or judicial interpretation. We exercise care in structuring our arrangements
with physicians and other referral sources to attempt to comply in all material respects with applicable laws. We also take such laws
into account when planning future marketing and other activities, and expect that our operations are in compliance with applicable laws.
The laws, rules and regulations described above are complex and subject to interpretation. In the event of a determination that we are
in violation of such laws, rules or regulations, or if further changes in the regulatory framework occur, any such determination or changes
could have a material adverse effect on our business. There can be no assurance however that we will not be found in noncompliance in
any particular situation.
Separately, Federal law
limits compounded drugs that are “essentially copies” of commercially available FDA approved drugs, including those with the
same route of administration. If our Mango ED and Mango GROW products, or any future products we may choose to market in the future are
deemed to be “essentially copies” of commercially available FDA approved drugs we would be prohibited from compounding such
drugs and would be unable to sell our Mango ED and Mango GROW drug or future products. If that were to occur, we would need to change
our business plan which would require substantial additional expenses and would have a material adverse effect on our cash flows and the
value of our securities.
Marketing activities
for our Mango ED and Mango GROW products are subject to strict governmental regulation which may limit our ability to market or promote
such product.
Our business model depends
on qualifying for certain statutory exemptions for drugs that are compounded by pharmacies in accordance with applicable requirements.
Pharmacy compounding is also subject to state oversight and regulation. Federal requirements include obtaining individual prescriptions
establishing that the compounded drug is necessary for each drug prescribed for each of our customers. Federal law also limits compounded
drugs that are “essentially copies” of commercially available FDA approved drugs, including those with the same route of administration.
These restrictions will limit our ability to market compounded drugs that have the same active ingredients and route of administration
as FDA-approved drugs, unless the compounded version offers a significant difference that the prescriber determines is necessary for each
individual patient.
The FDA also has the authority
to impose significant restrictions on approved products through regulations on advertising, promotional and distribution activities. In
particular, the FDA will object to any promotional activity (including through testimonials and surrogates) that is “false or misleading
in any particular,” including the failure to disclose material facts. For example, the FDA will expect adequate substantiation for
an efficacy claim, which would require substantial evidence derived from adequate and well-controlled clinical trials. We believe we can
conduct truthful and non-misleading promotional activities, including activities involving the use of testimonials and surrogates, with
limited claims that do not require substantial evidence derived from adequate and well-controlled clinical trials and which do not include
efficacy claims. If our products (including our Mango ED and Mango GROW products) are marketed in contradiction with FDA laws and regulations,
the FDA may issue warning letters that require specific remedial measures to be taken, as well as an immediate cessation of the impermissible
conduct, resulting in adverse publicity. The FDA may also require that all future promotional materials receive prior agency review and
approval before use. Certain states have also adopted regulations and reporting requirements surrounding the promotion of pharmaceuticals.
Failure by us or any of our collaborators to comply with state requirements may affect our ability to promote or sell future products
in certain states. This, in turn, could have a material adverse impact on our financial results and financial condition and could subject
us to significant liability, including civil and administrative remedies as well as criminal sanctions.
These restrictions may be
more burdensome for compounded products as compared with FDA approved products because the latter have substantial evidence of safety
and effectiveness, which will limit our ability to compete against the sale of comparable FDA-approved products.
Evolving government
regulations and enforcement activities may require increased costs or adversely affect our results of operations.
Our operations may be subject
to direct and indirect adoption, expansion or reinterpretation of various laws and regulations. Compliance with these evolving laws, regulations
and interpretations may require us to change our practices at an undeterminable and possibly significant initial monetary and annual expense.
These additional monetary expenditures may increase future overhead, which could have a material adverse effect on our results of operations.
There could also be laws and regulations applicable to our business that we have not identified or that, if changed, may be costly to
us, and we cannot predict all the ways in which implementation of such laws and regulations may affect us.
Additionally, the introduction
of new products may require us to comply with additional, yet undetermined, laws and regulations. Compliance may require obtaining appropriate
federal, state, or local licenses or certificates, increasing our security measures and expending additional resources to monitor developments
in applicable rules and ensure compliance. The failure to adequately comply with these future laws and regulations may delay or possibly
prevent our products from being offered to customers, which could have a material adverse effect on our business, financial condition,
and results of operations.
Failure to comply with
federal, state and foreign laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current
or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could adversely affect our business
and our financial condition.
A variety of federal, state
and foreign laws and regulations govern the collection, use, retention, sharing and security of consumer data. Laws and regulations relating
to privacy, data protection and consumer protection are evolving and subject to potentially differing interpretations. These requirements
may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our
practices. As a result, our practices may not comply with all such laws, regulations, requirements and obligations. Any failure, or perceived
failure, by us to comply with any federal, state or foreign privacy or consumer protection-related laws, regulations, industry self-regulatory
principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations
relating to privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, investigations,
proceedings or actions against us by governmental entities or others or other liabilities or require us to change our operations.
We collect, store, process, and use personal information and other customer data, and will rely on third parties that are not directly under our control to manage certain of these operations and to collect, store, process and use payment information. Our customers’ personal information may include names, addresses, phone numbers, email addresses, payment card data, and payment account information, as well as other information. Due to the volume and sensitivity of the personal information and data we and these third parties manage, the security features of our information systems are critical. If our security measures, some of which are managed by third parties, are breached or fail, unauthorized persons may be able to access sensitive customer data, including payment card data. If we or our independent service providers or business partners experience a breach of systems that collect, store or process our members’ and customers’ sensitive data, our brand could be harmed, sales of our products could decrease, and we could be exposed to claims, losses, administrative fines, litigation or regulatory and governmental investigations and proceedings. Any such claim, investigation, proceeding or action could hurt our reputation, brand and business, force us to incur significant expenses in defense of such proceedings, distract our management, increase our costs of doing business, result in a loss of customers and suppliers and may result in the imposition of monetary penalties and administrative fines. Depending on the nature of the information compromised, we may also have obligations to notify users, law enforcement, or payment companies about the incident and may need to provide some form of remedy, such as refunds, for the individuals affected by the incident.
Privacy laws, rules, and regulations
are constantly evolving in the United States and abroad and may be inconsistent from one jurisdiction to another. We expect that new industry
standards, laws and regulations will continue to be proposed regarding privacy, data protection and information security in many jurisdictions,
including privacy acts previously adopted by the states of California, Colorado, Connecticut, Delaware, Indiana, Iowa, Montana, New Jersey,
Oregon, Tennessee, Texas, Utah, and Virginia, certain of which are already effective, and certain of which become effective during 2023,
and from 2024 to 2026. We cannot yet determine the impact such future laws, regulations and standards may have on our business. Complying
with these evolving obligations is costly. For instance, expanding definitions and interpretations of what constitutes “personal
data” (or the equivalent) within the United States and elsewhere may increase our compliance costs. Any failure to comply could
give rise to unwanted media attention and other negative publicity, damage our customer and consumer relationships and reputation, and
result in lost sales, claims, administrative fines, lawsuits or regulatory and governmental investigations and proceedings and may harm
our business and results of operations.
Our
Compounded Products have not been, and will not be, approved by the FDA. The use of such products may cause serious side effects which
could subject us to material litigation, damages and penalties.
Our
Compounded Products have not been, and will not be, approved by the FDA. It is compounded using bulk drug substances and as such, we believe
it is exempt from specific FDA approval, provided that it is compounded in accordance with statutory requirements. Because compounded
drugs are not FDA-approved, the FDA does not verify their safety, effectiveness, or quality before they are marketed. In addition, poor
compounding practices can result in serious drug quality problems, such as contamination or a drug that contains too much or too little
active ingredient, among other possible quality deficiencies.
We
are not aware of any clinical studies involving the administration of Sildenafil or Tadalafil sublingually at the doses we intend to provide
patients, or the compounding of Sildenafil or Tadalafil, Oxytocin, and L-arginine to treat ED, as is contemplated by our Mango ED products.
We are also not aware of any clinical studies involving the administration of Minoxidil and Finasteride sublingually at the dose we provide
patients, or the compounding of Minoxidil, Finasteride, Vitamin D3 and Biotin, to attempt to treat hair loss, as is contemplated by our
Mango GROW product. We are also not aware of any clinical studies involving the administration of Enclomiphene Citrate, Pregnenolone,
and DHEA sublingually at the dose we provide patients, or the compounding of these ingredients to attempt to manage and balance hormones,
as is contemplated by our Mango MOJO product. We are also not aware of any clinical studies involving the administration of Semaglutide
sublingually at the dose we provide patients, or the compounding of Semaglutide with Vitamin B6 to attempt to assist with weight management,
as is contemplated by our Mango SLIM product.
Because
our Compounded Products have not been, and will not be, approved by the FDA, our products have not had the benefit of the FDA’s
clinical trial protocol which seeks to prevent the possibility of serious patient injury and death. If this were to occur, we could be
subject to litigation and governmental action, which could result in costly litigation, significant fines, judgments or penalties. For
example, in October 2012, a pharmacy in Massachusetts shipped compounded drugs that were contaminated with a fungus throughout the country,
and these drugs were injected into patients’ spines and joints. More than 750 people in 20 states developed fungal infections, and
more than 60 people died. This type of action could have a significant negative impact on our brand name, results of operations and cash
flows, and result in us having to cease selling products, curtailing our business plan, or seeking bankruptcy protection.
The main ingredients
of our Compounded Products are publicly disclosed and are being specially compounded for the customer by a pharmacist with a physician’s
prescription, and as a result, our Compounded Products formula can be replicated by other companies.
Because
our Compounded Products are being specially compounded for customers by a pharmacist with a physician’s prescription and because
the ingredients for our Compounded Products are publicly disclosed, these product formulas can be replicated by other companies. As a
result, competitors, including those with greater resources, marketing, and brand recognition, may compete against us in the future using
our exact product ingredients or variations thereof. We may be unable to distinguish our Compounded Products from copycat products and
may not be able to differentiate our product from competitors in the marketplace. As a result, we may fail to obtain a significant market
share, or may lose any market share we may obtain in the future, may be unable to compete with competitors, and may be forced to abandon
or curtail our business plan, which could cause the value of our shares to decline in value or become worthless.
Our Compounded Products
need to be compounded by licensed pharmacists who are subject to risks regarding applicable exemptions from the FFDCA Act.
Section 503A of the FFDCA
describes the conditions under which compounded human drug products are exempt from the FFDCA sections on FDA approval prior to marketing,
current good manufacturing practice requirements, and labeling with adequate directions for use. One of these conditions is that the drugs
must be compounded based on the receipt of valid patient-specific prescriptions. Our Compounded Products needs to be compounded by licensed
pharmacists, after being prescribed by a licensed physician. Licensed pharmacists who compound drug products in accordance with Section
503A of the FFDCA are not required to comply with CGMP requirements and the drugs that they compound are not required to be approved by
the FDA, provided that the compounding complies with applicable requirements. Therefore, the FDA is often not aware of potential problems
with compounded drug products or compounding practices unless it receives a complaint, such as a report of a serious adverse event or
visible contamination. As such, the compounding of our products is subject to limited FDA oversight, which could lead to such products
not being compounded safely and could lead to product recalls and litigation which could have a significant negative impact on our brand
name, results of operations and cash flows, and result in us having to cease selling products, curtailing our business plan, or seeking
bankruptcy protection. Neither we, nor our representatives have had any conversations with the FDA staff regarding whether our Compounded
Products can be sold pursuant to Section 503A of the FFDCA Act and future conversations with the FDA may result in the FDA staff raising
issues with such sales pursuant to Section 503A of the FFDCA, requiring certain pre-requisites or changes to our current business plan,
which may be costly or time consuming, and/or may result in us being prohibited from selling our Compounded Products pursuant to Section
503A of the FFDCA Act. We also face risks that the compounding of our products does not fall within the exemption from the FFDCA provided
by Section 503A thereof. For example, if the FDA determined that any of our products are essentially a copy of an FDA approved product,
we would be severely limited in our ability to compound such a product. If any of the above were to apply, we may need to change our business
plan or compounding activities, which could force us to curtail our business plan or expend significant additional resources to obtain
FFDCA or FDA approval for our products.
Notwithstanding the above,
under relevant FDA guidance, the FDA generally does not consider a compounded drug to be “essentially a copy” of a commercially
available drug if the compounded drug has a different route of administration as compared with the approved alternative, and our Compounded
Products are for a different route of administration (e.g., sublingual). In addition, we do not expect that we will be deemed to have
engaged in such “copying”, because our Compounded Products are based on a prescriber’s determination for each patient
that the change associated with the compounded product (our Compounded Products) produces for the patient a significant difference as
compared with the commercially available drug product. Under relevant FDA guidance, the FDA does not consider a compounded drug “essentially
a copy” if a prescriber determines that there is a change, made for an identified individual patient, which produces for that patient
a significant difference from the commercially available product.
Health care services,
including arrangements with health care professionals, are heavily regulated at the state level, and the laws and regulations may be changed
or subject to new interpretations.
Each state separately licenses
health care professionals and determines when and under what conditions they may interact with and provide services to patients. Telehealth
consultations initiated through our platform must be offered in accordance with the laws and regulations of the state where a patient
is located, which may include laws that restrict the corporate practice of medicine and fee splitting. Each state’s laws are subject
to legislative and regulatory changes, as well as judicial interpretations, and future changes or interpretations of state laws restricting
the corporate practice of medicine and fee splitting could adversely affect the permissibility of (a) our relationship with the Telemedicine
Providers; and/or (b) the Telemedicine Providers relationships with its contracted physicians. If our relationship with the Telemedicine
Providers and/or the Telemedicine Providers’ relationship with its contracted physicians needed to be restructured in light of any
such adverse changes or interpretations, that restructuring could negatively affect our ability to connect consumers with medical providers
in certain states, and thus those customers’ ability to ultimately receive our products.
We do not have a pharmacy
and depend on a related party to compound our Mango product and other potential future men’s wellness products.
We rely on a related party
pharmacy for the manufacture of our Mango product and will rely on this pharmacy or others for any potential future men’s wellness
products we market and we cannot assure you that they will be successful. This subjects us to a number of risks, including the following:
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we may not be able to control the commercialization of our products, including the amount, timing and quality of resources that our contracting parties may devote to our products; |
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our contracting parties may experience financial, regulatory or operational difficulties, which may impair their ability to fulfill their contractual obligations; |
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business combinations or significant changes in a contracting parties’ business strategy may adversely affect a contracting party’s willingness or ability to perform their obligations under any arrangement; |
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legal disputes or disagreements may occur with one or more of our contracting parties or between our contracting parties and our suppliers or former contracting parties; and |
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a contracting party could independently move forward with a competing product developed either independently or in collaboration with others, including with one of our competitors. |
If any of our contracting
parties fail to fulfill their future contractual obligations, our business may be negatively affected and we may receive limited or no
revenues under our agreements with them. See also the risk factor, “The related party pharmacy we have entered into an agreement
with may not receive licenses in all of the 50 United States to provide national coverage for us to sell our Mango ED and Mango GROW products
and future products” below.
Our use and disclosure
of personally identifiable information, including health information, is subject to federal and state privacy and security regulations,
and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability
or reputational harm and, in turn, a material adverse effect on our client base and revenue.
Numerous state and federal
laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability and integrity of personally
identifiable information, or PII, including protected health information, or PHI. These laws and regulations include the Health Information
Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical
Health Act, or HITECH, and their implementing regulations (referred to collectively as “HIPAA”). HIPAA establishes a set of
basic national privacy and security standards for the protection of PHI. HIPAA requires us to develop and maintain policies and procedures
with respect to PHI that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect
such information. HIPAA imposes mandatory penalties for certain violations. Penalties for violations of HIPAA and its implementing regulations
start at $100 per violation and are not to exceed $50,000 per violation, subject to a cap of $1.5 million for violations of the same standard
in a single calendar year. However, a single breach incident can result in violations of multiple standards. HIPAA also authorizes state
attorneys general to file suit on behalf of their residents. Courts are able to award damages, costs and attorneys’ fees related
to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue us in civil court
for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence
or recklessness in the misuse or breach of PHI. In addition, HIPAA mandates that the Secretary of Health and Human Services, or HHS, conduct
periodic compliance audits of HIPAA covered entities or business associates for compliance with the HIPAA Privacy and Security Standards.
It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive
a percentage of the Civil Monetary Penalty fine paid by the violator. HIPAA further requires that patients be notified of any unauthorized
acquisition, access, use or disclosure of their unsecured PHI that compromises the privacy or security of such information, with certain
exceptions related to unintentional or inadvertent use or disclosure by employees or authorized individuals. HIPAA specifies that such
notifications must be made “without unreasonable delay and in no case later than 60 calendar days after discovery of the breach.”
If a breach affects 500 patients or more, it must be reported to HHS without unreasonable delay, and HHS will post the name of the breaching
entity on its public web site. Breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the
local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually.
Numerous other federal and
state laws protect the confidentiality, privacy, availability, integrity and security of PII, including PHI. These laws in many cases
are more restrictive than, and may not be pre-empted by, the HIPAA rules and may be subject to varying interpretations by courts and government
agencies, creating complex compliance issues for us and our clients and potentially exposing us to additional expense, adverse publicity
and liability.
Because of the extreme sensitivity
of the PII we store and transmit, the security features of our technology platform are very important. If our security measures are breached
or fail, unauthorized persons may be able to obtain access to sensitive client data, including HIPAA-regulated PHI. As a result, our reputation
could be severely damaged, adversely affecting client confidence. In addition, we could face litigation, damages for contract breach,
penalties and regulatory actions for violation of HIPAA and other applicable laws or regulations and significant costs for remediation,
notification to individuals and for measures to prevent future occurrences. Any potential security breach could also result in increased
costs associated with liability for stolen assets or information, repairing system damage that may have been caused by such breaches,
incentives offered to clients in an effort to maintain our business relationships after a breach and implementing measures to prevent
future occurrences, including organizational changes, deploying additional personnel and protection technologies, training employees and
engaging third-party experts and consultants.
Risks Related to Related Party Relationships
and Transactions and Our Management
We depend heavily on
our senior management, including our Chief Executive Officer, who may have a conflict of interest with regard to various matters. The
ability of certain key employees to devote adequate time to us is critical to the success of our business, and failure to do so may adversely
affect our revenues and as a result could materially adversely affect our business, financial condition and results of operations.
We must retain the services
of our key employees and strategically recruit and hire new talented employees. Our future business and results of operations depend in
significant part upon the continued contributions of our senior management personnel, particularly our Chairman and Chief Executive Officer,
Jacob D. Cohen. Mr. Cohen is currently a co-Manager and 52% owner of Epiq Scripts, and as Chief Executive Officer of Ronin Equity Partners,
Inc., a private investment company, and in various positions with other entities and groups. Mr. Cohen currently spends approximately
95% of his time on Company matters. As a result, Mr. Cohen dedicates only a portion of his professional efforts to our business and operations,
and there is no contractual obligation for him to spend a specific amount of his time with us. Mr. Cohen may not be able to dedicate adequate
time to our business and operations and we could experience an adverse effect on our operations due to the demands placed on him from
his other professional obligations. Such involvement in other businesses may therefore present a conflict of interest regarding decisions
he makes for us or with respect to the amount of time available for us. If we lose his services or if he fails to perform in his current
position, or if we are not able to attract and retain skilled personnel as needed, our business could suffer. Significant turnover in
our senior management could significantly deplete our institutional knowledge held by our existing senior management team. We depend on
the skills and abilities of these key personnel in managing our operations, product development, marketing and sales aspects of our business,
any part of which could be harmed by turnover in the future.
Moving forward, should the
services of Mr. Cohen be lost for any reason, we will incur costs associated with recruiting replacements and any potential delays in
operations which this may cause. If we are unable to replace such individual with a suitably trained alternative individual(s), we may
be forced to scale back or curtail our business plan.
Separately, if our executive
officers do not devote sufficient time towards our business, we may never be able to effectuate our business plan.
We have engaged and
in the future may engage in transactions with related parties and such transactions present possible conflicts of interest that could
have an adverse effect on us.
We have entered, and may
continue to enter, into transactions with related parties for financing, corporate, business development and operational services. Included
in such transactions is a Master Services Agreement and Statement of Work and Consulting Agreement with Epiq Scripts, LLC, a related party,
52% owned and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer, for pharmacy and compounding services, which has
been assigned to Mango & Peaches. Such transactions may not have been/may not be, entered into on an arm’s-length basis, and
we may have achieved more or less favorable terms because such transactions were entered into with our related parties. This could have
a material effect on our business, results of operations and financial condition. Such conflicts could cause an individual in our management
to seek to advance his or her economic interests or the economic interests of certain related parties above ours. Further, the appearance
of conflicts of interest created by related party transactions could impair the confidence of our investors.
We
are significantly reliant on related party relationships.
We
have entered into a Master Services Agreement and Statement of Work with Epiq Scripts, LLC, a related party, 51% owned and controlled
by Jacob D. Cohen, our Chairman and Chief Executive Officer, who also serves as a co-Manager of Epiq Scripts for pharmacy and compounding
services. In the event that relationship is terminated, our costs may increase, and we may be unable to effectively obtain the services
currently provided by Epiq Scripts, LLC. Additionally, certain of our consultants are employed by Epiq Scripts, LLC. We also anticipate
entering into other related party relationships in the future. While we believe that all related party agreements have been and will
be on arms-length terms, such significant related party relationships may be perceived negatively by potential shareholders or investors
and/or may result in conflicts of interest. Each of our officers and directors (including those discussed above) presently has, and any
of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director
may be required to present a business opportunity to such entity, subject to his or her fiduciary duties under applicable law. Additionally,
such persons may have conflicts of interest in allocating their time among various business activities. These conflicts may not be resolved
in our favor. Our significant related party relationships and transactions, the terms of such relationships and transactions, and/or
the termination of any such relationships or transactions, may have a material adverse effect on our results of operations moving forward
and/or create conflicts of interest or perceived conflicts of interest which may have a material adverse effect on the value of our securities.
The
related party pharmacy we have entered into an agreement with may not receive licenses in all of the 50 United States to provide national
coverage for us to sell our pharmaceutical products and future products.
We
have entered into a Master Services Agreement and Statement of Work with Epiq Scripts, LLC, a related party, 52% owned and controlled
by Jacob D. Cohen, our Chairman and Chief Executive Officer, for pharmacy and compounding services. Epiq Script’s ability to provide
pharmacy services in each state is subject to, among other things, receipt of regulatory approvals and licenses in the states in which
it operates. Currently Epiq Scripts holds State Board of Pharmacy (or its equivalent) licenses to operate in the District of Columbia
and all states except Alabama. Its loss of regulatory approval or licenses in the future, may prohibit us from selling our Mango products
to customers that reside in those states limiting our ability to grow and compete with other companies that have those capabilities.
Any of the above may have an adverse effect on our revenues, operations and cash flow and cause the value of our securities to decline
in value or become worthless. We also face related party conflicts associated with our engagement of Epiq Scripts, LLC as discussed in
greater detail above.
Assuming
the shareholder approval of the issuance of the Mango & Peaches Common Shares and Mango & Peaches Series A Shares, Jacob D. Cohen,
our Chairman and Chief Executive Officer will exercise majority voting control over Mango & Peaches, which following the transactions
related to the Contribution Agreement, holds substantially all of our assets and operations, which limits shareholders’ abilities
to influence corporate matters and could delay or prevent a change in corporate control.
Pursuant
to the December 13, 2024, Contribution Agreement, the Company contributed substantially all of its assets, including ownership of: (a)
its 98% ownership of MangoRx Mexico S.A. de C.V., a Mexican Stock Company; and (b) its 100% ownership of MangoRx UK Limited, a company
incorporated under the laws of the United Kingdom, to Mango & Peaches, in order to restructure the ownership and operations of the
Company, better segregate such operations and liabilities and provided for the issuance of a portion of the capital of Mango & Peaches
to Mr. Jacob Cohen, the Chief Executive Officer of the Company, , pursuant to which the Company agreed to issue Mr. Cohen (a) 1,700,000
shares of the common stock of Mango & Peaches (representing 25.4% of Mango and Peaches’ then outstanding shares of common stock);
and (b) 100 shares Series A Super Majority Voting Preferred Stock of Mango & Peaches, discussed in greater detail below, which issuances
are subject to shareholder approval, which shareholder approval the Company expects to solicit from shareholders in the near future.
In
consideration for the transfer of the assets, the Company received 4,999,999 shares of Mango & Peaches’ common stock, bringing
its ownership to 5,000,000 shares of common stock of Mango & Peaches upon the closing of the Contribution Agreement.
Pursuant
to the Contribution Agreement, Mango & Peaches assumed all of the liabilities of the Company relating to the Contributed Assets contributed,
but none of the other liabilities of the Company and the Company agreed to indemnify Mango & Peaches against any damages relating
to a breach of any representation or warranty of the Company in the Contribution Agreement, or any claim relating to the Contributed
Assets, before the Contribution Effective Date; and Mango & Peaches agreed to indemnify the Company against any damages relating
to a breach of any representation or warranty of Mango & Peaches in the Contribution Agreement, or any claim relating to the Contributed
Assets, after the Contribution Effective Date. The Contribution Agreement and the contribution and assumption provided for therein was
effective December 15, 2024.
The
Mango & Peaches Series A Shares have the right to vote on all shareholder matters (including, but not limited to at every meeting
of the stockholders of Mango & Peaches and upon any action taken by stockholders of Mango & Peaches with or without a meeting)
equal to fifty-one percent (51%) of the total vote, and for so long as Series A Preferred Stock is outstanding, Mango & Peaches shall
not, without the affirmative vote of the holders of at least 66-2/3% of all outstanding shares of Series A Preferred Stock, voting separately
as a class (i) amend, alter or repeal any provision of the Certificate of Formation or the Bylaws of Mango & Peaches so as to adversely
affect the designations, preferences, limitations and relative rights of the Series A Preferred Stock, (ii) effect any reclassification
of the Series A Preferred Stock, (iii) designate any additional series of preferred stock, the designation of which adversely effects
the rights, privileges, preferences or limitations of the Series A Preferred Stock; or (iv) amend, alter or repeal any provision of the
Series A Designation (except in connection with certain non-material technical amendments). Additionally, subject to the rights of series
of preferred stock which may from time to time come into existence, so long as any shares of Series A Preferred Stock are outstanding,
Mango & Peaches cannot without first obtaining the approval (by written consent, as provided by law) of the holders of a majority
of the then outstanding shares of Series A Preferred Stock, voting together as a class: (a) issue any additional shares of Series A Preferred
Stock after the original issuance of shares of Series A Preferred Stock; (b) increase or decrease the total number of authorized or designated
shares of Series A Preferred Stock; (c) effect an exchange, reclassification, or cancellation of all or a part of the Series A Preferred
Stock; (d) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of
Series A Preferred Stock; or (e) alter or change the rights, preferences or privileges of the shares of Series A Preferred Stock so as
to affect adversely the shares of such series, including the rights set forth in the Series A Designation.
As
a result of the issuance of the Mango & Peaches Common Shares and Mango & Peaches Series A Shares, Mr. Cohen will obtain majority
control over substantially all of the assets and operations of the Company at the time of the entry into the Contribution Agreement,
which following the Contribution Effective Date, are held by Mango & Peaches, including the right to vote 75.5% of Mango & Peaches
outstanding voting shares as result of his ownership of Mango & Peaches Common Shares and the Mango & Peaches Series A Shares,
which will provide him the right to approve any merger or consolidation of Mango & Peaches and/or any amendment to the Certificate
of Formation of Mango & Peaches.
Additionally,
Mr. Cohen, pursuant to the terms of his Employment Agreement, as amended, has the right to earn up to $10 million bonus (the “Mango
& Peaches Bonus”), which is convertible at his option, at a conversion price of $0.50 per share, into up to 20,000,000
shares of common stock of Mango & Peaches. In the event the full amount of the Mango & Peaches Bonus, vests to Mr. Cohen and
he converts such entire Mango & Peaches Bonus into 20,000,000 Mango & Peaches Bonus Shares pursuant to the conversion terms thereof,
he will own 81.3% of Mango & Peaches outstanding common stock (not factoring in any other issuances), and 92.8% of Mango & Peaches’
outstanding voting stock (as a result of the ownership of the Mango & Peaches Series A Shares and not factoring in any future issuances).
There is no assurance that any of the milestones will be reached by Mango & Peaches and/or that any portion of the Mango & Peaches
Bonus will vest to Mr. Cohen or that any Mango & Peaches Bonus Shares will be issued to Mr. Cohen.
As
a result, Mr. Cohen will control the Mango & Peaches shareholder vote. Consequently, he has the ability to influence matters affecting
Mango & Peaches and therefore exercise significant control in determining the outcome of all corporate transactions or other matters
involving Mango & Peaches, including (i) making amendments to Mango & Peaches’ certificate of formation; (ii) whether to
issue additional shares of common stock and preferred stock of Mango & Peaches, including to himself; (iii) employment decisions,
including compensation arrangements; (iv) whether to enter into material transactions with related parties; (v) election of directors;
and (vi) any merger or significant corporate transactions, including with himself or other related parties. Additionally, it will be
difficult if not impossible for investors to remove Mr. Cohen as a director of Mango & Peaches, which will mean he will remain in
control of who serves as officers of the Company as well as whether any changes are made in the Board of Directors. Because Mr. Cohen
will significantly influence the vote on all Mango & Peaches shareholder matters, investors may find it difficult to replace our
management if they disagree with the way our business is being operated. The interests of Mr. Cohen may not coincide with our interests
or the interests of other shareholders of the Company or Mango & Peaches.
In
addition, this concentration of ownership might adversely affect the market price of our common stock by: (1) delaying, deferring or
preventing a change of control of our Company or Mango & Peaches; (2) impeding a merger, consolidation, takeover or other business
combination involving our Company or Mango & Peaches; or (3) discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of our Company or Mango & Peaches.
Potential
competition from our existing executive officers, after they leave their employment with us, and subject to the non-compete terms of
their employment agreements, could negatively impact our profitability.
Although
our Chief Executive Officer, Jacob D. Cohen, and our Chief Operating Officer, Amanda Hammer, are prohibited from competing with us while
they are employed with us and for 12 months thereafter (subject to the terms of, and exceptions set forth in, their employment agreements
with the Company), none of such individuals will be prohibited from competing with us after such 12-month period ends. Additionally,
the Federal Trade Commission recently proposed a new rule that, if it becomes effective, would ban employers from imposing non-competes
on their workers, which if effective could prohibit the Company from enforcing, or invalidate, the non-competes in our executive’s
and in certain other employee’s, employment agreements. Finally, various states have recently enacted rules banning non-competes,
including California. Accordingly, any of these individuals could be in a position to use industry experience gained while working with
us to compete with us. Such competition could distract or confuse customers, reduce the value of our intellectual property and trade
secrets, or reduce our future revenues, earnings or growth prospects.
Risks
Related to Intellectual Property
We
operate in an industry with the risk of intellectual property litigation. Claims of infringement against us may hurt our business.
We
must protect the proprietary nature of the intellectual property used in our business. There can be no assurance that trade secrets and
other intellectual property will not be challenged, invalidated, misappropriated or circumvented by third parties.
Additionally,
our success depends, in part, upon non-infringement of intellectual property rights owned by others and being able to resolve claims
of intellectual property infringement without major financial expenditures or adverse consequences. Participants that own, or claim to
own, intellectual property may aggressively assert their rights. From time to time, we may be subject to legal proceedings and claims
relating to the intellectual property rights of others. Future litigation may be necessary to defend us by determining the scope, enforceability,
and validity of third-party proprietary rights or to establish its proprietary rights. Our competitors have substantially greater resources
and are able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time. In
addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.
Regardless of whether claims that we are infringing patents or other intellectual property rights have any merit, these claims are time-consuming
and costly to evaluate and defend and could:
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divert
management’s attention and resources; |
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require
technology changes to our products that would cause our Company to incur substantial cost; |
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us to significant liabilities; and |
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In
addition to liability for monetary damages, which may be tripled and may include attorneys’ fees, or, in some circumstances, damages
against clients, we may be prohibited from developing, commercializing, or continuing to provide some or all of our products unless we
obtain licenses from, and pay royalties to, the holders of the patents or other intellectual property rights, which may not be available
on commercially favorable terms, or at all.
Risks
Related to the Telehealth Operations of Our Contracting Parties
The
telehealth business of our telehealth provider could be adversely affected by ongoing legal challenges or by new state actions restricting
the ability to provide telehealth services in certain states.
We
use telehealth providers to provide telehealth consultations and related services on our Mangoceuticals platform, which connects users/customers
with third-party health care providers and Epiq Scripts, LLC, a related party pharmacy. We have entered into an agreement with Doctegrity,
pursuant to which Doctegrity provides clinical services directly to our customers via telehealth. Through these arrangements, the professionals
or professional entities are responsible for the practice of medicine and control of the clinical decision-making.
Our
ability to conduct business operations in each state is dependent upon the state’s treatment of medicine under such state’s
laws, and rules and policies governing the practice of physician supervised services, which are subject to changing political, regulatory
and other influences.
We depend on our contracted parties to maintain appropriate telehealth licenses to be able to provide telehealth services to our potential customers and prescribe them our products, which are required to be prescribed by licensed physicians. In the event we are not able to maintain relationships with telehealth providers, state licensing laws make it harder, more costly or impossible to provide telehealth services, or our customers are otherwise unable to obtain prescriptions for our products, we may be unable to sell products, which could result in us having to curtail our business plan or cease operating.
Our
contracting parties’ telehealth business could be adversely affected by ongoing legal challenges to their business model or by
new state actions restricting their ability to provide the full range of services in certain states.
The
ability of our contracted parties’ telehealth operations in each state is dependent upon the state’s treatment of medicine
under such state’s laws, rules and policies governing the practice of physician supervised services, which are subject to changing
political, regulatory and other influences. In the event our contracted parties are unable to provide telehealth services for any reason,
it would have a material adverse effect on our ability to sell products and in turn our revenues and operating results.
Risks
Related to Our Governing Documents and Texas Law
Our
Certificate of Formation, Bylaws and Texas law provide for indemnification of officers and directors at our expense and limit the liability
of our directors, which may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be
expended for the benefit of officers or directors.
Our
Certificate of Formation, Bylaws and Texas law provide for us to indemnify and hold harmless, to the fullest extent permitted by applicable
law, each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending
or completed action, suit or proceeding by reason of the fact that he or she is or was a director or officer of the Company or, while
a director or officer of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee
benefit plan. Our Certificate of Formation also provides that the personal liability of our directors is eliminated to the fullest extent
permitted by the Texas Business Organizations Code, as such may be amended or supplemented. These indemnification obligations and limitations
of liability may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended
for the benefit of officers or directors.
We
have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities
arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection
with our activities, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a
court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely
to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially reduce the market
and price for our shares.
We
have established preferred stock which can be designated by our Board of Directors without shareholder approval.
We
have 10,000,000 shares of preferred stock authorized, of which 6,000 shares have been designated as Series B Convertible Preferred Stock,
and 6,250,000 shares have been designated as Series C Preferred Stock. Additional shares of our preferred stock may be issued from time
to time in one or more series, each of which shall have a distinctive designation or title as shall be determined by our Board of Directors
prior to the issuance of any shares thereof. The preferred stock shall have such voting powers, full or limited, or no voting powers,
and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions
thereof as adopted by the Board of Directors. Because the Board of Directors is able to designate the powers and preferences of the preferred
stock without the vote of a majority of our shareholders, our shareholders will have no control over what designations and preferences
our preferred stock will have. The currently outstanding preferred stock or issuance of additional shares of preferred stock or the rights
associated therewith, could cause substantial dilution to our existing shareholders. Additionally, the dilutive effect of any preferred
stock which we have or may issue may be exacerbated given the fact that such preferred stock may have voting rights and/or other rights
or preferences which could provide the preferred shareholders with substantial voting control over us and/or give those holders the power
to prevent or cause a change in control, even if that change in control might benefit our shareholders. As a result, the issuance of
shares of preferred stock may cause the value of our securities to decrease.
Anti-takeover
provisions in our Certificate of Formation and our Bylaws, as well as provisions of Texas law, might discourage, delay or prevent a change
in control of our company or changes in our management and, therefore, depress the trading price of our common stock.
Our
Certificate of Formation, Bylaws and Texas law contain provisions that may discourage, delay or prevent a merger, acquisition or other
change in control that shareholders may consider favorable, including transactions in which you might otherwise receive a premium for
your shares of our common stock. These provisions may also prevent or delay attempts by our shareholders to replace or remove our management.
Our corporate governance documents include provisions:
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requiring
advance notice of shareholder proposals for business to be conducted at meetings of our shareholders and for nominations of candidates
for election to our Board of Directors; |
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authorizing
blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock;
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indemnification to, our directors and officers. |
The
existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the
future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that
you could receive a premium for your common stock in an acquisition.
Risks
Related to Our Preferred Stock
Our
Series B Convertible Preferred Stock and 6% Series C Convertible Cumulative Preferred Stock include a liquidation preference.
Our
Series B Preferred Stock includes a liquidation preference of $1,100 per share, which may be increased from time to time pursuant to
the terms of such Series B Preferred Stock (currently totaling an aggregate of $2,809,400 for all 2,554 outstanding shares of Series
B Preferred Stock) which is payable upon liquidation, before any distribution to our common stock shareholders. Our Series C Preferred
Stock includes a liquidation preference of $20 per share, which may be increased from time to time pursuant to the terms of such Series
C Preferred Stock (currently totaling an aggregate of $19,600,000 for all outstanding shares of Series C Preferred Stock) which is payable
upon liquidation, before any distribution to our common stock shareholders, but after distributions to our Series B Preferred Stock holders.
As a result, if we were to dissolve, liquidate or sell our assets, the holders of our Series B Preferred Stock would have the right to
receive up to the first approximately $2,809,400 in proceeds from any such transaction and holders of our Series C Preferred Stock would
have the right to receive up to approximately $19.6 million of the remaining proceeds from any such transaction. The payment of the liquidation
preferences could result in common stock shareholders not receiving any consideration if we were to liquidate, dissolve or wind up, either
voluntarily or involuntarily. Additionally, the existence of the liquidation preferences may reduce the value of our common stock, make
it harder for us to sell shares of common stock in offerings in the future, or prevent or delay a change of control. Because our Board
of Directors is entitled to designate the powers and preferences of the preferred stock without a vote of our shareholders, subject to
Nasdaq rules and regulations, our shareholders will have no control over what designations and preferences our future preferred stock,
if any, will have.
The
issuance of common stock upon conversion of the Series B Preferred Stock and Series C Preferred Stock and upon exercise of the Warrants
will cause immediate and substantial dilution to existing shareholders.
Each
holder of Series B Preferred Stock may, at its option, convert its shares of Series B Preferred Stock into that number of shares of common
stock equal to the Stated Value of such share of Series B Preferred Stock (initially $1,100 per share), divided by $1.50.
Each
holder of Series C Preferred Stock may, at its option, convert its shares of Series C Preferred Stock into that number of shares of common
stock equal to the Stated Value of such share of Series C Preferred Stock, divided by the conversion price of $150.00 per share (i.e.,
initially a 2-for-1 conversion ratio), subject to adjustment for stock splits and stock dividends, with any fractional shares rounded
up to the nearest whole share.
The
issuance of common stock upon conversion of the Series B Preferred Stock and Series C Preferred Stock will result in immediate and substantial
dilution to the interests of other stockholders since the holders of the Series B Preferred Stock and Series C Preferred Stock may ultimately
receive and sell the full amount of shares issuable in connection with the conversion of such Series B Preferred Stock and Series C Preferred
Stock. Although the Series B Preferred Stock, and Series C Preferred Stock may not be converted by the holders thereof if such conversion
would cause such holder to own more than 4.99% (4.999% in the case of the Series C Preferred Stock) of our outstanding common stock (which
may be increased to 9.999% with at least 61 days prior written notice on a per shareholder basis for holders of our Series C Preferred
Stock), these restrictions do not prevent such holders from converting some of their holdings, selling those shares, and then converting
the rest of their holdings, while still staying below the 4.99%/9.999% limit. In this way, the holders of the Series B Preferred Stock
and Series C Preferred Stock could sell more than these limits while never actually holding more shares than the limits allow. If the
holders of the Series B Preferred Stock or Series C Preferred Stock choose to do this, it will cause substantial dilution to the then
holders of our common stock.
The
availability of shares of common stock upon conversion of the Series B Preferred Stock and Series C Preferred Stock for public resale,
as well as any actual resales of these shares, could adversely affect the trading price of our common stock. We cannot predict the size
of future issuances of our common stock upon the conversion of our Series B Preferred Stock and Series C Preferred Stock and/or upon
exercise of warrants, or the effect, if any, that future issuances and sales of shares of our common stock may have on the market price
of our common stock. Sales or distributions of substantial amounts of our common stock upon the conversion of our Series B Preferred
Stock and Series C Preferred Stock and upon exercise of warrants, or the perception that such sales could occur, may cause the market
price of our common stock to decline.
In
addition, the common stock issuable upon the conversion of our Series B Preferred Stock and Series C Preferred Stock and upon exercise
of warrants may represent overhang that may also adversely affect the market price of our common stock. Overhang occurs when there is
a greater supply of a company’s stock in the market than there is demand for that stock. When this happens the price of our stock
will decrease, and any additional shares which stockholders attempt to sell in the market will only further decrease the share price.
If the share volume of our common stock cannot absorb shares sold by holders of the Series B Preferred Stock and Series C Preferred Stock
and warrants, then the value of our common stock will likely decrease.
Our
outstanding Series B Preferred Stock previously accrued, and our Series C Preferred Stock accrues a dividend.
From
and after the issuance date of the Series B Preferred Stock, of which 2,554 shares are currently outstanding, each share of Series B
Preferred Stock was entitled to receive, when, as and if authorized and declared by the Board of Directors of the Company, out of any
funds legally available therefor, cumulative dividends in an amount equal to (i) the 10% per annum on the stated value (initially $1,100
per share or $110 per year) as of the record date for such dividend (as described in the Series B Designation), and (ii) on an as-converted
basis, any dividend or other distribution, whether paid in cash, in-kind or in other property, authorized and declared by the Board of
Directors on the issued and outstanding shares of common stock in an amount determined by assuming that the number of shares of common
stock into which such shares of Series B Preferred Stock could be converted on the applicable record date for such dividend or distribution.
Effective on March 20, 2025, with the filing of an amendment to the Series B Designation, the rights to dividends on the Series B Preferred
Stock, unless declared on the common stock, in which case the Series B Preferred Stock will participate on an as-converted basis, were
terminated.
From
and after the issuance date of the Series C Preferred Stock, each share of Series C Preferred Stock is entitled to receive, when, as
and if authorized and declared by the Board of Directors of the Company, out of any funds legally available therefor, cumulative dividends
in an amount equal to (i) the 6% per annum on the stated value (initially $20 per share) as of the record date for such dividend (as
described in the Series C Designation), and (ii) on an as-converted basis, any dividend or other distribution, whether paid in cash,
in-kind or in other property, authorized and declared by the Board of Directors on the issued and outstanding shares of common stock
in an amount determined by assuming that the number of shares of common stock into which such shares of Series C Preferred Stock could
be converted on the applicable record date for such dividend or distribution.
Accrued
dividends may be settled in cash, subject to applicable law, shares of common stock (valued at the closing price on the date the dividend
is due) or in-kind, by increasing the stated value by the amount of the quarterly dividend.
In
the event dividends are paid in Common Stock, the number of shares payable will be calculated by dividing the accrued dividend by the
closing sales price of the Company’s common stock. If the Company is prohibited from paying, or chooses not to pay the dividend
in cash or common stock, the Company may pay the dividend by increasing the Stated Value of the preferred stock.
We
may choose not to pay such dividends in cash, may not have sufficient available cash to pay the dividends as they accrue or may be prohibited
contractually, or pursuant to applicable law, from paying such dividends in cash. The payment of the dividends could reduce our available
cash on hand, have a material adverse effect on our results of operations and cause the value of our stock to decline in value. Additionally,
the issuance of shares of common stock or an increase in the Stated Value of our Series C Preferred Stock in lieu of cash dividends (and
the subsequent conversion of such Series C Preferred Stock into common stock pursuant to the terms of such Series C Preferred Stock)
could cause substantial dilution to the then holders of our common stock.
Risks
Related to Our Common Stock
Stockholders
may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of additional shares
of our common stock.
Wherever
possible, our Board of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that
the non-cash consideration will consist of restricted shares of our common stock or where shares are to be issued to our officers, directors
and applicable consultants. Our Board of Directors has authority, without action or vote of the stockholders, but subject to Nasdaq rules
and regulations (which generally require stockholder approval for any transactions which would result in the issuance of more than 20%
of our then outstanding shares of common stock or voting rights representing over 20% of our then outstanding shares of stock), to issue
all or part of the authorized but unissued shares of common stock. In addition, we may attempt to raise capital by selling shares of
our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing stockholders,
which may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing
management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting
existing management.
Our
common stock prices have been, and may continue to be, volatile and could decline substantially following the date of this Prospectus.
The
market price of our common stock may be highly volatile and subject to wide fluctuations. Our financial performance, government regulatory
action, tax laws, interest rates, and market conditions in general could have a significant impact on the future market price of our
common stock.
Some
of the factors that could negatively affect or result in fluctuations in the market price of our common stock include:
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or anticipated variations in our quarterly operating results; |
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in market valuations of similar companies; |
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adverse
market reaction to the level of our indebtedness; |
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additions
or departures of key personnel; |
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actions
by shareholders; |
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speculation
in the press or investment community; |
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general
market, economic, and political conditions, including an economic slowdown or dislocation in the global credit markets; |
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announcements
by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments; |
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general
economic and market conditions; |
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disputes
or other developments related to our intellectual property or other proprietary rights, including litigation; |
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our
operating performance and the performance of other similar companies; |
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changes
in accounting principles; and |
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passage
of legislation or other regulatory developments that adversely affect us or our industry. |
If
our stock price fluctuates you could lose a significant part of your investment.
The
market price of our common stock could be subject to wide fluctuations in response to, among other things, the risk factors described
in this prospectus, and other factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to
be comparable to us For example, since our common stock began trading on the Nasdaq Capital Market in connection with our IPO on March
20, 2023, the trading price of our common stock has traded as high as $65.55 and as low as $2.07 per share. Furthermore, the stock markets
have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many
companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad
market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes
or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that
have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the
target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s
attention from other business concerns, which could seriously harm our business.
There
is no guarantee that our common stock will continue to trade on the Nasdaq Capital Market.
Our
common stock is currently listed on Nasdaq under the symbol “MGRX”. There is no guarantee that we will be able to
maintain our listing on Nasdaq for any period of time. Among the conditions required for continued listing on Nasdaq, Nasdaq requires
us to maintain at least $2.5 million in stockholders’ equity, $35 million in market value of listed securities, or $500,000 in
net income over the prior two years or two of the prior three years, to have a majority of independent directors (subject to certain
“controlled company” exemptions), to comply with certain audit committee requirements, and to maintain a stock price
over $1.00 per share.
Our
stockholders’ equity has in the past not been above Nasdaq’s $2.5 million minimum, we may not generate over $500,000 of yearly
net income moving forward, we may not maintain $35 million in market value of listed securities, we may not be able to maintain independent
directors (to the extent required), and as discussed above, we have in the past not maintained a stock price over $1.00 per share. Nasdaq’s
determination that we fail to meet the continued listing standards of Nasdaq may result in our securities being delisted from Nasdaq.
The
absence of such a listing on Nasdaq may adversely affect the acceptance of our common stock as currency or the value accorded by other
parties. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of
our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders
to sell our common stock in the secondary market. If our common stock is delisted by Nasdaq, our common stock may be eligible to trade
on an over-the-counter quotation system, such as the OTCQB Market or the Pink Open Market, where an investor may find it more difficult
to sell our securities or obtain accurate quotations as to the market value of our securities. In the event our common stock is delisted
from Nasdaq in the future, we may not be able to list our common stock on another national securities exchange or obtain quotation on
an over-the counter quotation system.
A
delisting of our common stock from Nasdaq could adversely affect our business, financial condition and results of operations and our
ability to attract new investors, reduce the price at which our common stock trades, decrease, investors’ ability to make transactions
in our common stock, decrease the liquidity of our outstanding shares, increase the transaction costs inherent in trading such shares,
and reduce our flexibility to raise additional capital without overall negative effects for our stockholders.
If
securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our
stock price and trading volume may decline.
The
trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us,
our business, our markets and our competitors. We do not control these analysts. If securities analysts do not cover our common stock,
the lack of research coverage may adversely affect the market price of our common stock. Furthermore, if one or more of the analysts
who do cover us downgrade our stock or if those analysts issue other unfavorable commentary about us or our business, our stock price
would likely decline. If one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose
visibility in the market and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline
and may also impair our ability to expand our business with existing customers and attract new customers.
Certain
of our outstanding warrants include anti-dilution and reset rights.
We
currently have outstanding warrants to purchase 2,062,333 shares of common stock with a weighted average exercise price of $2.84 per
share. The exercise price of a total of 1,650,000 of those warrants, with an exercise price of $1.50 per share have anti-dilutive rights,
such that 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.
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.
Anti-dilutive
rights of the warrants may cause the exercise price of the warrants to decrease significantly, may result to significant dilution to
existing stockholders, and may prevent us from completing otherwise accretive transactions.
The
sale of shares of common stock under an Equity Purchase Agreement may cause significant dilution to existing shareholders.
The
issuance of shares of common stock pursuant to the terms of an April 5, 2024, Equity Purchase Agreement (the “ELOC”),
discussed in greater below under “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity
and Capital Resources-Funding Arrangements”, will have a dilutive effect on the Company’s existing stockholders, including,
over time, the voting power of the existing stockholders. The issuance of shares of common stock pursuant to the terms of the ELOC (pursuant
to which we are able to sell up to $25 million shares of common stock, subject to certain requirements, of which $1,185,019 of gross
proceeds or 305,000 total shares of common stock have been sold to date) will also dilute the ownership interests of our existing stockholders.
The availability of these shares for public resale, as well as any actual resales of these shares, could adversely affect the trading
price of our common stock. We cannot predict the size of future issuances of our common stock pursuant to the terms of the ELOC, or the
effect, if any, that future issuances and sales of shares of our common stock may have on the market price of our common stock. Sales
or distributions of substantial amounts of our common stock pursuant to the terms of the ELOC, or the perception that such sales could
occur, may cause the market price of our common stock to decline.
In
addition, the common stock issuable pursuant to the terms of the ELOC may represent overhang that may also adversely affect the market
price of our common stock. Overhang occurs when there is a greater supply of a company’s stock in the market than there is demand
for that stock. When this happens the price of our stock will decrease, and any additional shares which stockholders attempt to sell
in the market will only further decrease the share price. If the share volume of our common stock cannot absorb shares sold by the Purchaser,
then the value of our common stock will likely decrease.
We
have filed a registration statement to permit the public resale of the shares of common stock issuable pursuant to the terms of the ELOC.
The influx of those shares into the public market could potentially have a negative effect on the trading price of our common stock.
The
shares of common stock to be sold pursuant to the terms of the ELOC are to be sold based on a discount to fluctuating market prices and
as a result, we are unable to accurately forecast or predict with certainty the total amount of shares of Company common stock that may
be issued to the Purchaser under the ELOC; however, we expect such sales, if any to cause significant dilution to existing shareholders.
Future
sales of our common stock, other securities convertible into our common stock, or preferred stock could cause the market value of our
common stock to decline and could result in dilution of your shares.
Our
Board of Directors is authorized, without your approval, to cause us to issue additional shares of our common stock or to raise capital
through the creation and issuance of additional preferred stock, other debt securities convertible into common stock, options, warrants
and other rights, on terms and for consideration as our Board of Directors in its sole discretion may determine. Sales of substantial
amounts of our common stock or of preferred stock could cause the market price of our common stock to decrease significantly. We cannot
predict the effect, if any, of future sales of our common stock, or the availability of our common stock for future sales, on the value
of our common stock. Sales of substantial amounts of our common stock by large shareholders, or the perception that such sales could
occur, may adversely affect the market price of our common stock.
We
have no intention of declaring dividends on our common stock in the foreseeable future.
The
decision to pay cash dividends on our common stock rests with our Board of Directors and will depend on our earnings, unencumbered cash,
capital requirements and financial condition. We do not anticipate declaring any dividends on our common stock in the foreseeable future,
as we intend to use any excess cash to fund our operations. Investors in our common stock should not expect to receive dividend income
on their investment, and investors will be dependent on the appreciation of our common stock to earn a return on their investment.
The
issuance and sale of common stock upon exercise of outstanding warrants may cause substantial dilution to existing shareholders and may
also depress the market price of our common stock. Outstanding warrants to purchase shares of our common stock have cashless exercise
rights.
As
of May 27, 2025, we had a total of 2,053,042 warrants outstanding with a weighted average exercise price of $2.25
per share and term ranging from August 16, 2027 through May 26, 2030. If the holders of the warrants choose to exercise the warrants,
it may cause significant dilution to the then holders of our common stock. If exercises of the warrants and sales of such shares issuable
upon exercise thereof take place, the price of our common stock may decline. In addition, the common stock issuable upon exercise of
the warrants may represent overhang that may also adversely affect the market price of our common stock. Overhang occurs when there is
a greater supply of a company’s stock in the market than there is demand for that stock. When this happens the price of our stock
will decrease, and any additional shares which shareholders attempt to sell in the market will only further decrease the share price.
If the share volume of our common stock cannot absorb shares sold by the warrant holders, then the value of our common stock will likely
decrease.
General
Risk Factors
Our
industry and the broader U.S. economy experienced higher than expected inflationary pressures during 2022 related to continued supply
chain disruptions, labor shortages and geopolitical instability, and if these conditions persist, our business, results of operations
and cash flows could be materially and adversely affected.
2022
saw significant increases in the costs of labor and certain materials and equipment, and longer lead times for such materials and equipment,
as a result of availability constraints, supply chain disruption, increased demand, labor shortages associated with a fully employed
U.S. labor force, high inflation and other factors. Supply and demand fundamentals have been further aggravated by disruptions in global
energy supply caused by multiple geopolitical events, including the ongoing conflict between Russia and Ukraine. Recent supply chain
constraints and inflationary pressures may in the future adversely impact our operating costs, and as a result, our business, financial
condition, results of operations and cash flows could be materially and adversely affected.
We
and the health and wellness industry in general may be adversely affected during periods of high inflation, primarily because of higher
shipping and product manufacturing costs. While we plan to attempt to pass on increases in our costs through increased sales prices,
market forces may limit our ability to do so. If we are unable to raise sales prices enough to compensate for higher costs, our future
revenues, gross profit margin and revenues could be adversely affected.
Economic
uncertainty may affect our access to capital and/or increase the costs of such capital.
Global
economic conditions continue to be volatile and uncertain due to, among other things, consumer confidence in future economic conditions,
fears of recession and trade wars, the price of energy, fluctuating interest rates, the availability and cost of consumer credit, the
availability and timing of government stimulus programs, levels of unemployment, increased inflation, tax rates, and the war between
Ukraine and Russia which began in February 2022, and has continued through the date of this prospectus, as well as the current ongoing
war between Hamas and Israel, which began in October 2023, and has continued through the date of this prospectus. These conditions remain
unpredictable and create uncertainties about our ability to raise capital in the future. In the event required capital becomes unavailable
in the future, or more costly, it could have a material adverse effect on our business, future results of operations, and financial condition.
Our
business may be materially and adversely disrupted by epidemics or pandemics in the future.
An
epidemic, pandemic or similar serious public health issue, and the measures undertaken by governmental authorities to address it, could
significantly disrupt or prevent us from operating our business in the ordinary course for an extended period, and thereby, and/or along
with any associated economic and/or social instability or distress, have a material adverse impact on our consolidated financial
statements.
Our
business could be disrupted by catastrophic events and man-made problems, such as power disruptions, data security breaches, and terrorism.
Our
systems are vulnerable to damage or interruption from the occurrence of any catastrophic event, including earthquake, fire, flood, or
other weather event, power loss, telecommunications failure, software or hardware malfunction, cyber-attack, war, terrorist attack, or
incident of mass violence, which could result in lengthy interruptions in access to our systems. In addition, acts of terrorism, including
malicious internet-based activity, could cause disruptions to the internet or the economy as a whole. If our systems were to fail or
be negatively impacted as a result of a natural disaster or other event, our ability to provide products to customers would be impaired
or we could lose critical data. We do not carry business interruption insurance sufficient to compensate us for the potentially significant
losses, including the potential harm to our business, financial condition and results of operations that may result from interruptions
in access to our platform as a result of system failures.
Economic
uncertainty may affect consumer purchases of discretionary items, which may affect demand for our products.
Our
products may be considered discretionary items for consumers. Factors affecting the level of consumer spending for such discretionary
items include general economic conditions and other factors such as consumer confidence in future economic conditions, fears of recession
and trade wars, the price of energy, fluctuating interest rates, the availability and cost of consumer credit, the availability and timing
of government stimulus programs, levels of unemployment, inflation, and tax rates. As U.S. economic conditions continue to be volatile
or economic uncertainty remains, and with increasing inflation and interest rates, trends in consumer discretionary spending also remain
unpredictable and subject to reductions as a result of significant increases in employment, financial market instability, and uncertainties
about the future. Unfavorable economic conditions have led, and in the future may lead, consumers to reduce their spending on men’s
wellness products, which in turn has in the past led to a decrease in the demand for such products. Consumer demand for the Company’s
products may decline as a result of an economic downturn, or economic uncertainty. The sensitivity to economic cycles and any related
fluctuation in consumer demand may have a material adverse effect on the Company’s business, results of operations, and financial
condition.
Global
economic conditions could materially adversely affect our business, results of operations, financial condition and growth.
Adverse
macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs, changes to fiscal and monetary policy,
tighter credit, higher interest rates, high unemployment and currency fluctuations could materially adversely affect our operations,
expenses, access to capital and the market for our products. In addition, consumer confidence and spending could be adversely affected
in response to financial market volatility, negative financial news, conditions in the real estate and mortgage markets, declines in
income or asset values, changes to fuel and other energy costs, labor and healthcare costs and other economic factors.
In
addition, uncertainty about, or a decline in, global or regional economic conditions could have a significant impact on our expected
funding sources, suppliers and partners. Potential effects include financial instability; inability to obtain credit to finance operations
and purchases of our products; and insolvency.
A
downturn in the economic environment could also lead to limitations on our ability to issue new debt; reduced liquidity; and declines
in the fair value of our financial instruments. These and other economic factors could materially adversely affect our business, results
of operations, financial condition and growth.
We
may become party to litigation, mediation and/or arbitration from time to time given our product focus.
We
may become party to regulatory proceedings, litigation, mediation and/or arbitration from time to time in the ordinary course of business
which could adversely affect our business. Monitoring and defending against legal actions, whether or not meritorious, can be time-consuming,
divert management’s attention and resources and cause us to incur significant expenses. In addition, legal fees and costs incurred
in connection with such activities may be significant and we could, in the future, be subject to judgments or enter into settlements
of claims for significant monetary damages. While we expect to have insurance in the future that may cover the costs and awards of certain
types of litigation, the amount of our future insurance may not be sufficient to cover any costs or awards. Substantial litigation costs
or an adverse result in any litigation may adversely impact our business, operating results or financial condition.
Higher
labor costs due to statutory and regulatory changes could materially adversely affect our business, financial condition and operating
results.
Various
federal and state labor laws, including new laws and regulations enacted in response to COVID-19, govern our relationships with our employees
and affect operating costs. These laws include employee classifications as exempt or non-exempt, minimum wage requirements, unemployment
tax rates, workers’ compensation rates, overtime, family leave, workplace health and safety standards, payroll taxes, citizenship
requirements and other wage and benefit requirements for employees classified as non-exempt. As certain of our employees are paid at
rates set at, or above but related to, the applicable minimum wage, further increases in the minimum wage could increase our labor costs.
Significant additional government regulations could materially adversely affect our business, financial condition and operating results.
Failure
to adequately manage our planned aggressive growth strategy may harm our business or increase our risk of failure.
For
the foreseeable future, we intend to pursue an aggressive growth strategy for the expansion of our operations through increased marketing.
Our ability to rapidly expand our operations will depend upon many factors, including our ability to work in a regulated environment,
establish and maintain strategic relationships with suppliers, and obtain adequate capital resources on acceptable terms. Any restrictions
on our ability to expand may have a materially adverse effect on our business, results of operations, and financial condition. Accordingly,
we may be unable to achieve our targets for sales growth, and our operations may not be successful or achieve anticipated operating results.
Additionally,
our growth may place a significant strain on our managerial, administrative, operational, and financial resources and our infrastructure.
Our future success will depend, in part, upon the ability of our senior management to manage growth effectively. This will require us
to, among other things:
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implement
additional management information systems; |
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further
develop our operating, administrative, legal, financial, and accounting systems and controls; |
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hire
additional personnel; |
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develop
additional levels of management within our company; |
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locate
additional office space; and |
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maintain
close coordination among our operations, legal, finance, sales and marketing, and client service and support personnel. |
As
a result, we may lack the resources to deploy our services on a timely and cost-effective basis. Failure to accomplish any of these requirements
could impair our ability to deliver services in a timely fashion or attract and retain new customers.
If
we make any acquisitions, they may disrupt or have a negative impact on our business.
If
we make acquisitions in the future, we could have difficulty integrating the acquired company’s assets, personnel and operations
with our own. We do not anticipate that any acquisitions or mergers we may enter into in the future would result in a change of control
of the Company. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect
expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt
our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions
are accompanied by a number of inherent risks, including, without limitation, the following:
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the
difficulty of integrating acquired products, services or operations; |
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the
potential disruption of the ongoing businesses and distraction of our management and the management of acquired companies; |
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difficulties
in maintaining uniform standards, controls, procedures and policies; |
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the
potential impairment of relationships with employees and customers as a result of any integration of new management personnel; |
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the
potential inability or failure to achieve additional sales and enhance our customer base through cross-marketing of the products
to new and existing customers; |
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the
effect of any government regulations which relate to the business acquired; |
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potential
unknown liabilities associated with acquired businesses or product lines, or the need to spend significant amounts to retool, reposition
or modify the marketing and sales of acquired products or operations, or the defense of any litigation, whether or not successful,
resulting from actions of the acquired company prior to our acquisition; and |
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potential
expenses under the labor, environmental and other laws of various jurisdictions. |
Our
business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems
encountered in connection with an acquisition, many of which cannot be presently identified. These risks and problems could disrupt our
ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations.
Claims,
litigation, government investigations, and other proceedings may adversely affect our business and results of operations.
We
may be subject to actual and threatened claims, litigation, reviews, investigations, and other proceedings, including proceedings relating
to products offered by us and by third parties, and other matters. Any of these types of proceedings, may have an adverse effect on us
because of legal costs, disruption of our operations, diversion of management resources, negative publicity, and other factors. The outcomes
of these matters are inherently unpredictable and subject to significant uncertainties. Determining legal reserves and possible losses
from such matters involves judgment and may not reflect the full range of uncertainties and unpredictable outcomes. Until the final resolution
of such matters, we may be exposed to losses in excess of the amount recorded, and such amounts could be material. Should any of our
estimates and assumptions change or prove to have been incorrect, it could have a material effect on our business, consolidated financial
position, results of operations, or cash flows. In addition, it is possible that a resolution of one or more such proceedings, including
as a result of a settlement, could require us to make substantial future payments, prevent us from offering certain products or services,
require us to change our business practices in a manner materially adverse to our business, requiring development of non-infringing or
otherwise altered products or technologies, damaging our reputation, or otherwise having a material effect on our operations.
We
may incur indebtedness in the future which could reduce our financial flexibility, increase interest expense and adversely impact our
operations and our costs.
We
may incur significant amounts of indebtedness in the future. Our level of indebtedness could affect our operations in several ways, including
the following:
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a
significant portion of our cash flows is required to be used to service our indebtedness; |
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high level of debt increases our vulnerability to general adverse economic and industry conditions; |
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covenants
contained in the agreements governing our outstanding indebtedness limit our ability to borrow additional funds and provide additional
security interests, dispose of assets, pay dividends and make certain investments; |
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a
high level of debt may place us at a competitive disadvantage compared to our competitors that are less leveraged and, therefore,
may be able to take advantage of opportunities that our indebtedness may prevent us from pursuing; and |
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debt
covenants may affect our flexibility in planning for, and reacting to, changes in the economy and in our industry. |
A
high level of indebtedness increases the risk that we may default on our debt obligations. We may not be able to generate sufficient
cash flows to pay the principal or interest on our debt, and future working capital, borrowings or equity financing may not be available
to pay or refinance such debt. If we do not have sufficient funds and are otherwise unable to arrange financing, we may have to sell
significant assets or have a portion of our assets foreclosed upon which could have a material adverse effect on our business, financial
condition and results of operations.
For
all of the foregoing reasons and others set forth herein, an investment in our securities involves a high degree of risk.
Additional
Risk Factors:
Investors
who buy shares in this offering at different times will likely pay different prices.
Investors
who purchase shares of common stock in this offering at different times will likely pay different prices, and so may experience different
levels of dilution and different outcomes in their investment results. Similarly, the Purchaser may sell such shares of common stock
at different times and at different prices. Investors may experience a decline in the value of the shares they purchase from the Purchaser
in this offering as a result of sales made by us in future transactions to the Purchaser at prices lower than the prices they paid. Sales
to the Purchaser by us could result in substantial dilution to the interests of other holders of our common stock. Additionally, the
sale of a substantial number of shares of our common stock to the Purchaser, or the anticipation of such sales, could make it more difficult
for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales,
which could have a materially adverse effect on our business and operations.
Our
management will have broad discretion over the use of the net proceeds from our sale of shares of common stock to the Purchaser, and
you may not agree with how we use the proceeds and the proceeds may not be invested successfully.
Our
management will have broad discretion with respect to the use of proceeds from the sale of any shares of our common stock to the Purchaser,
including for any of the purposes described in the section of this prospectus entitled “Use of Proceeds.” You will be relying
on the judgment of our management regarding the application of the proceeds from the sale of any shares of our common stock to the Purchaser.
The results and effectiveness of the use of proceeds are uncertain, and we could spend the proceeds in ways that you do not agree with
or that do not improve our results of operations or enhance the value of our common stock. Our failure to apply these funds effectively
could harm our business, delay the development of our pipeline product candidates and cause the price of our common stock to decline.
We
may require additional financing to sustain our operations, without which we may not be able to continue operations, and the terms of
subsequent financings may adversely impact our stockholders.
We
may direct the Purchaser to purchase up to $25,000,000 worth of shares of our common stock under the ELOC until April 4, 2026, in amounts
up to $25,000,000 in shares of our common stock depending on market prices.
Our
ability to sell shares to the Purchaser and obtain funds under the ELOC is limited by the terms and conditions in the ELOC, including
restrictions on the amounts we may sell to the Purchaser at any one time, and a limitation on our ability to sell shares to the Purchaser
to the extent that it would cause the Purchaser to beneficially own more than 9.99% of our outstanding shares of common stock. Additionally,
we will only be able to sell or issue to the Purchaser (subject to certain reductions and other adjustments pursuant to the ELOC, the
“Exchange Cap”) in total under the ELOC, which is equal to 19.99% of the aggregate number of shares outstanding prior to
execution of the ELOC, unless stockholder approval is obtained to issue in excess of such amount. Therefore, we may not in the future
have access to the full amount available to us under the ELOC, depending on the price of our common stock. In addition, any amounts we
sell under the ELOC may not satisfy all of our funding needs, even if we are able and choose to sell and issue all of our common stock
currently registered.
The
extent we rely on the Purchaser as a source of funding will depend on a number of factors including the prevailing market price of our
common stock and the extent to which we are able to secure working capital from other sources. If obtaining sufficient funding from the
Purchaser were to prove unavailable or prohibitively dilutive, we will need to secure another source of funding in order to satisfy our
working capital needs. Depending on the type and the terms of any financing we pursue, stockholders’ rights and the value of their
investment in our common stock could be reduced. A financing could involve one or more types of securities including common stock, convertible
debt, or warrants to acquire common stock. These securities could be issued at or below the then prevailing market price for our common
stock. If the issuance of new securities results in diminished rights to holders of our common stock, the market price of our common
stock could be negatively impacted. Should the financing we require to sustain our working capital needs be unavailable or prohibitively
expensive when we require it, the consequences could be a material adverse effect on our business, operating results, financial condition,
and prospects.
USE
OF PROCEEDS
Any
proceeds received by the Company from the sale of shares of Common Stock from the exercise of the Warrants will be used for general working
capital. A portion of the net proceeds from the sale of our common stock will go to the selling stockholders as described below in the
sections entitled “Selling Stockholders” and “Plan of Distribution”. We have agreed to bear the expenses relating
to the registration of the shares of common stock for the selling stockholders.
Dividend
Policy
We
have never declared or paid any cash dividends on our capital stock. We currently intend to retain earnings, if any, to finance the growth
and development of our business. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of
future dividends, if any, will be at the discretion of our Board of Directors and will depend on our financial condition, results of
operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors
the board deems relevant
Management’s
Discussion and Analysis of
Financial
Condition and Results of Operations
The
following discussion of the Company’s historical performance and financial condition should be read together with the consolidated
financial statements and related notes incorporated by reference herein. This discussion contains forward-looking statements based
on the views and beliefs of our management, as well as assumptions and estimates made by our management. These statements by their nature
are subject to risks and uncertainties, and are influenced by various factors. As a consequence, actual results may differ materially
from those in the forward-looking statements. See “Risk Factors” included herein for the discussion of risk factors and see
“Cautionary Statement Regarding Forward-Looking Statements” for information on the forward-looking statements included below.
The
following discussion is based upon our consolidated financial statements incorporated by reference in this prospectus,
which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated
financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingencies.
Introduction
Our
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition
to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations,
financial condition, and cash flows. MD&A is organized as follows:
| ● |
Key
Performance Indicators. Indicators describing our performance for the periods presented. |
| |
|
| ● |
Plan
of Operations. A description of our plan of operations for the next 12 months including required funding. |
| |
|
| ● |
Results
of Operations. An analysis of our financial results comparing the quarters ended March 31, 2024 and 2023. |
| |
|
| ● |
Liquidity
and Capital Resources. An analysis of changes in our balance sheets and cash flows and discussion of our financial condition. |
| |
|
| ● |
Critical
Accounting Policies and Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments
incorporated in our reported financial results and forecasts. |
See
also “Glossary of Industry Terms” above for information on certain of the terms used below.
Plan
of Operations
We
had working capital deficit of $1.3 million as of December 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.
Our
plan for the next 12 months is to continue using the same marketing and management strategies and continue providing a quality product
with excellent customer service while also seeking to expand our operations organically or through acquisitions as funding and opportunities
arise. As our business continues to grow, customer feedback will be integral in making small adjustments to improve products and our
overall customer experience.
We
are headquartered in Dallas, Texas and intend to grow our business both organically and through identifying acquisition targets over
the next 12 months in the technology, health and wellness space, funding permitting. Specifically, we plan to continue to make additional
and ongoing technology enhancements to our platform, further develop, market and advertise additional men’s health and wellness
related products on our telemedicine platform, and identify strategic acquisitions that complement our vision. As these opportunities
arise, we will determine the best method for financing such acquisitions and growth which may include the issuance of debt instruments,
common stock, preferred stock, or a combination thereof, all of which may result in significant dilution to existing shareholders.
We
may seek additional funding in the future through equity financings, debt financings or other capital sources, including collaborations
with other companies or other strategic transactions. We may not be able to obtain financing on acceptable terms or at all. The terms
of any financing may adversely affect the holdings or rights of our shareholders and/or create significant dilution. Although we continue
to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to
fund continued operations, if at all.
Strategic
Alternatives
In
October 2024, the Board of Directors of the Company initiated a process to evaluate potential strategic alternatives with the intent
to unlock and maximize shareholder value, including but not limited to potential mergers, acquisitions, divestitures and business combinations,
acquisitions of businesses, entry into new lines of business, business expansions, joint ventures, and other key strategic transactions
outside the ordinary course of the Company’s current business. This initiative is being be undertaken in parallel with the Company’s
current business operations. In consultation with financial and legal advisors, the Company intends to consider a broad range of strategic,
operational and financial alternatives, and is exploring a full range of options. There is no assurance that the strategic review process
will result in the approval or completion of any specific transaction or outcome. The Company has not established a timeline for completion
of the review process and does not intend to comment further unless and until its Board of Directors has approved a definitive course
of action, or it is determined that other disclosure is necessary or appropriate.
Results
of Operations – Comparison of the Three Months Ended March 31, 2025 and 2024
We
had revenues of $109,306 for the three months ended March 31, 2025, compared to revenues of $214,095 for the three months ended March
31, 2024, which decrease was mainly due to issues involving the transition and migration from our original telemedicine and software
platform to our new telehealth platform.
Cost
of revenues was $24,737 and $20,795 for the three months ended March 31, 2025 and 2024, respectively, which increase was due to fluctuations
in service usage and delivery costs during the current period.
Cost
of revenues - related party, representing amounts paid to Epiq Scripts, our related party pharmacy for pharmacy services, totaled $22,505
and $45,902 for the three months ended March 31, 2025 and 2024, respectively, which decrease in the current period was due to our decreased
revenues for the same period.
During
the first quarter of 2025, we further developed our website capabilities and continued preparation for the re-launch of our website.
Travel expenses were not separately disclosed for the three-month periods but are generally associated with costs related to vendor meetings,
promotional events, and other travel-related activities.
General
and administrative expenses were $1,542,444 and $771,958 for the three months ended March 31, 2025 and 2024, respectively, which
increase was mainly due to legal expenses, technology development costs and various expenses related to the acquisitions of intellectual
properties and the negotiations and entering into the various master distribution agreements for Diabetinol® and Dermytol.
Advertising and marketing expenses in the amount of $281,732 and $852,383 for the three months ended March 31, 2025 and 2024, respectively,
related to digital marketing, branding initiatives, and promotional events. The decrease was related to a reduction in advertising and
marketing while we focused on internal software development for our website re-launch.
Salaries
and benefits were $626,598 and $293,209 for the three months ended March 31, 2025 and 2024, respectively, which increase was due to the
engagement of new employees as we ramped up our internal operations in the current period.
Investor
relations expenses were $1,419,000 and $143,000 for the three months ended March 31, 2025 and 2024, respectively, which increase was
related to expanded efforts to raise public awareness of our stock during the current period.
Stock-based
compensation totaled $1,045,479 and $454,465 (inclusive of stock issued for services and issuances of options and warrants) for the three
months ended March 31, 2025 and 2024, respectively, which increase was due to greater use of equity-based incentives in the current period.
We
had a reduction of $13,700 and $0 of interest expense for the three months ended March 31, 2025 and 2024, respectively, which decrease
was due to interest accrued on certain notes payable that were settled by waiving the accrued interest during the 2025 period.
We
had a net loss of $4,839,489 for the three months ended March 31, 2025, compared to a net loss of $2,367,617 for the three months ended
March 31, 2024, an increase in net loss of $2,470,079 due to a reduction of income for the same period and increase in our general and
administrative expenses related to the acquisitions of intellectual properties and the negotiations and entering into the various master
distribution agreements for Diabetinol® and Dermytol.
Results
of Operations – Comparison of the year ended December 31, 2024 and 2023
Revenues
We
had revenues of $615,873 for the year ended December 31, 2024, compared to revenues of $731,493 for the year ended December 31, 2023,
which decrease was mainly due to issued involving the transition and migration from our original telemedicine and software platform to
our new telehealth platform.
Cost
of revenues was $93,296 and $154,900 for the years ended December 31, 2024 and 2023, respectively, which decrease was due to and in correlation
with our decreased revenues for the same period.
Cost
of revenues - related party, representing amounts paid to Epiq Scripts, our related party pharmacy for pharmacy services, totaled $142,613
and $145,092 for the years ended December 31, 2024 and 2023, which slight decrease in the current period was due to our decreased revenues
for the same period.
During
2024, we further developed our website capabilities and prepared for our re-launch of our website. Travel expenses of $199,822 and $301
170, for the years ended December 31, 2024 and 2023, respectively, related to cost associated with meeting with vendors, travel for promotional
events and other travel related expenses. We had a loss on sale of assets of $18,387 for the year ended December 31, 2024, compared to
$0 for the year ended December 31, 2023. On May 15, 2024, the Company disposed of $119,819 of equipment to Epiq 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 $18,387.
Advertising
and marketing expenses in the amount of $1,478,663 and $2,097,505, for the years ended December 31, 2024 and 2023, respectively, related
to digital marketing and advertising expenses, various branding initiatives and promotional events. The decrease was related to a reduction
in advertising and marketing, while we develop our internal software front and backend development of our website re-launch.;
Salaries
and benefits were $1,063,781 and $977,890 for the years ended December 31, 2024 and 2023, respectively, which increase was due to the
engagement of new employees as we ramped up our internal operations in the current period.
Investor
relations expenses were $453,749 and $1,100,465, for the years ended December 31, 2024 and 2023, respectively, related to awareness of
our stock to the public market. The decrease was due to lowering costs after our initial IPO in 2023.
Stock-based
compensation totaled $2,355,193 and $2,155,114 (including a total of $2,106,265 and $1,530,659 attributed to stock issued for services
and $248,682 and $624,463 attributed to stock-based compensation from issuances of options and warrants) for the years ended December
31, 2024 and 2023, respectively, which increase was due to us having issued less stock for compensation during the 2023 period.
We
had $13,700 and $0 of interest expense for the year ended December 31, 2024 and 2023 respectively, compared to interest income of $0
and $6,473 for the year ended December 31, 2024 and 2023, respectively, which increase in interest expense was due to interest accrued
on certain notes payable during the 2024 period and an increase in imputed interest income was related to cancelation of imputed interest
from repayment of related party notes payable during 2023.
We
had $721,533 and $0 of amortization expense for the year ended December 31, 2024 and 2023, respectively, in connection with the amortization
of our patents.
We
had a net loss of $8,707,226 for the year ended December 31, 2024, compared to a net loss of $9,212,417 for the year ended December 31,
2023, a decrease in net loss of $505,191 from the prior period due to less overall expenses required to operate the business during the
2024 period.
Liquidity
and Capital Resources
As
of March 31, 2025, we had $76,496 of cash on-hand, compared to $58,653 of cash on-hand of December 31, 2024. We also had $16,942 of security
deposit, representing the security deposit on our leased office space and $83,214 prepaid expense, related to ad placement advance payments.
$2,556 of property and equipment, net, consisting of computers, office and custom product packaging equipment. and $14,955,802 of patents,
net of amortization, which we acquired pursuant to certain Patent Purchase Agreements. We also had $6,576,998 as of March 31, 2025, representing
license agreements, net of amortization in connection with Diabetinol® and Dermytol..
Cash
decreased mainly due to funds used for general operating expenses.
As
of March 31, 2025, the Company had total current liabilities of $1,503,196, consisting of $1,178,180 of accounts payable and accrued
liabilities, $47,713 of right-of-use liability, operating lease, $251,424 of other liabilities related to amounts owed to Intramont in
connection with the purchase of intellectual property, and $25,879 of other liabilities - related parties, representing credit card payments
made by our CEO Jacob Cohen.
As
of March 31, 2025, we had $21,753,857 in total assets, $1,503,196 in total liabilities, a working capital deficit of $1.36 million
and a total accumulated deficit of $25,939,986.
As
of December 31, 2024, we had $58,653 of cash on-hand, compared to $739,006 of cash on-hand of December 31, 2023. We also had $16,942
of security deposit, representing the security deposit on our leased office space and $59,493 of right of use asset in connection with
our office space lease. $2,806 of property and equipment, net, consisting of computers, office and custom product packaging equipment.
and $15,232,617 of patents, net of amortization, which we acquired pursuant to the Patent Purchase Agreements described in greater detail
above under “Business-Material Agreements-Patent Purchase Agreements.”
Cash
decreased mainly due to funds used for general operating expenses.
As
of December 31, 2024, the Company had total current liabilities of $1,425,463, consisting of $837,501 of accounts payable and accrued
liabilities, $64,962 of right-of-use liability, operating lease, notes payable of $150,000 (discussed below), and $373,000 of other liabilities
related to amounts owed to Intramont in connection with the purchase of intellectual property.
As
of December 31, 2024, we had $15,370,511 in total assets, $1,425,463 in total liabilities, working capital deficit of $1.3 million
and a total accumulated deficit of $20,806,595.
We
have mainly relied on related party loans, as well as funds raised through the sale of securities, mainly through the private placement
offerings, our IPO and our Follow On Offering, each discussed below, and revenues generated from sales of our Pharmaceutical 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.
We
have experienced recurring net losses since inception. We believe that we will continue to incur substantial operating expenses in the
foreseeable future as we continue to invest to market and sell our Pharmaceutical Products and to attract customers, expand the product
offerings and enhance technology and infrastructure. These efforts may prove more expensive than we anticipate, and we may not succeed
in generating commercial revenues or net income to offset these expenses. Accordingly, we may not be able to achieve profitability, and
we may incur significant losses for the foreseeable future. Our independent registered public accounting firm included an explanatory
paragraph in its report on our consolidated financial statements as of December 31, 2024. As of March 31, 2025, our current capital resources,
combined with the net proceeds from the offering, are not expected to be sufficient for us to fund operations for the next 12 months.
We need to raise funding in addition to the funding raised in our IPO and Follow On Offering, to support our operations in the future.
We may also seek to acquire additional businesses or assets in the future, which may require us to raise funding. We currently anticipate
such funding being raised through the offering of debt or equity. Such additional financing, if required, may not be available on favorable
terms, if at all. If debt financing is available and obtained, our interest expense may increase and we may be subject to the risk of
default, depending on the terms of such financing. If equity financing is available and obtained it may result in our shareholders experiencing
significant dilution. If such financing is unavailable, we may be forced to curtail our business plan, which may cause the value of our
securities to decline in value. We currently have availability of approximately $600,000 under the ELOC, which funding we may request
from the Purchaser from time to time, subject to the terms thereof, and which funding, if requested may cause dilution to existing shareholders.
Additionally, we may receive funding upon the exercise of outstanding warrants from time to time, which exercises may cause dilution
to existing shareholders.
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 Pharmaceutical Products.
Cash
Flows
| | |
Three Months Ended March 31, 2025 | | |
Three Months Ended March 31, 2024 | |
| Cash provided by (used in): | |
| | | |
| | |
| Operating activities | |
$ | (2,274,781 | ) | |
$ | (991,131 | ) |
| Investing activities | |
| - | | |
| - | |
| Financing activities | |
| 2,285,000 | | |
| 267,500 | |
| Net increase (decrease) in cash and cash equivalents | |
$ | 10,220 | | |
$ | (723,631 | ) |
| | |
Year ended December 31, 2024 | | |
Year ended December 31, 2023 | |
| Cash provided by (used in): | |
| | | |
| | |
| Operating activities | |
$ | (4,863,776 | ) | |
$ | (6,997,375 | ) |
| Investing activities | |
| 65,000 | | |
| (3,519 | ) |
| Financing activities | |
| 4,128,268 | | |
| 7,057,040 | |
| Net (decrease) in cash and cash equivalents | |
$ | (670,508 | ) | |
$ | 56,146 | |
Net
Cash Used in Operating Activities
Net
cash used in operating activities was $2,274,781 for the three months ended March 31, 2025, which was mainly due to $4,839,489
of net loss, offset by $1,938,500 of common stock issued for services, and $340,678 of accounts payable and accrued liabilities.
Net
cash used in operating activities was $991,131 for the three months ended March 31, 2024, which was mainly due to $2,367,617 of net loss
offset by $416,500 of common stock issued for services and $875,180 of accounts payable and accrued liabilities.
Net
cash used in operating activities was $4,863,776 for the year ended December 31, 2024, which was mainly due to $8,707,226 of net loss,
offset by $2,106,265 of common stock issued for services, $248,682 of options vested for stock-based compensation and $721,533 for amortization
of intangible assets.
Net
cash used in operating activities was $6,997,375 for the year ended December 31, 2023, which was mainly due to $9,212,417 of net loss,
offset by $1,530,651 of common stock issued for services, and $624,563 of options vested for stock-based compensation.
Net
Cash Used in/Provided by Investing Activities
There
was no net cash used in investing activities for either the three months ended March 31, 2025 or 2024.
Net
cash provided by investing activities was $65,000 for the year ended December 31, 2024, compared to $3,519 used in investing activities
for the year ended December 31, 2023, which were for the sale of equipment and the purchase of equipment, respectively.
Net
Cash Provided by Financing Activities
Net
cash provided by financing activities was $2,285,000 for the three months ended March 31, 2025, which was mainly due to $1,150,000 of
proceeds from the sale of preferred stock for cash, $655,000 of proceeds from the sale of common stock for cash; and $480,000 of proceeds
from the exercise of warrants.
Net
cash provided by financing activities was $267,500 for the three months ended March 31, 2024, which was mainly due to $180,000 of proceeds
from the sale of common stock for cash and $87,500 borrowed from our Chief Executive Officer and Chairman, Jacob Cohen.
Net
cash provided by financing activities was $4,128,268 for the year ended December 31, 2024, which was mainly due to $2,650,000 of funds
raised from the sale of preferred stock for cash, $1,328,268 from the sale of common stock for cash and $150,000 in notes payable.
Net
cash provided by financing activities was $7,057,040 for the year ended December 31, 2023, which was mainly due to $6,200,000 of funds
raised in the IPO and Follow On Funding and $1,024,500 in proceeds from the exercise of warrants, offset by repayments of notes payable
of $78,260 and repayments of related party notes payable of $89,200.
Related
Party Loans and Advances
Issuances
and Sales of Securities
On
May 1, 2023, the Company issued Amanda Hammer, the Chief Operating Officer (COO) of the Company, 5,000 shares of commons tock under the
2022 Plan as a sign-on bonus and granted 10,000 options to purchase shares of common stock of the Company, under the 2022 Plan to Ms.
Hammer, related to her employment agreement. The options have an exercise price of $16.50 per share, an original life of five years and
vest at the annual renewal of their employment over three years.
On
October 1, 2023, the Company executed a Summary of Terms and Conditions (“Consulting Agreement”) with Eugene M. Johnston
continuing his appointment as the Company’s Chief Financial Officer on a full-time basis for a term of 12 months. Pursuant to the
Consulting Agreement, the Company issued Mr. Johnston 3,333 shares of the Company’s common stock and agreed to pay $2,000 per month.
The Consulting Shares were issued under, and subject to the terms of, the Company’s 2022 Equity Incentive Plan.
Effective
December 28, 2023, the Board of Directors, with the recommendation of the Compensation Committee of the Board of Directors, approved
the grant of stock options to purchase 83,333 shares of the Company’s common stock to Jacob D. Cohen, the Company’s Chief
Executive Officer and Chairman, in consideration for services rendered to the Company. The options were granted under the Company’s
2022 Equity Incentive Plan, and the options had a term of five years, subject in all cases to the terms and conditions of the 2022 Plan,
the award agreement entered into to evidence such grant, and Mr. Cohen’s continued service with the Company. The options vested
in full upon grant. The options have an exercise price of $4.80 per share, 110% of the closing sales price of the Company’s common
stock on the Nasdaq Capital Market on December 28, 2023, the date the grant was approved.
Effective
on June 3, 2024, the Company issued, after recommendation by the Compensation Committee of the Company’s Board of Directors and
approval by the Board of Directors, an aggregate of 83,333 fully-vested and earned shares of Company common stock under the Company’s
Amended and Restated Mangoceuticals, Inc. 2022 Equity Plan, in consideration as a bonus for 2024 (Mr. Cohen) and services rendered during
2024 (each other recipient), to certain officers, an employee and the Company’s directors. Included as part of the issuances was
the issuance of the following shares of common stock to officers and directors of the Company:
| Recipient | |
Position With Company | |
Shares | |
| Jacob D. Cohen | |
Chief Executive Officer and Chairman | |
| 53,333 | |
| Amanda Hammer | |
Chief Operating Officer | |
| 6,667 | |
| Kenny Myers | |
Director | |
| 6,667 | |
| Alex Hamilton | |
Director | |
| 6,667 | |
| Lorraine D’Alessio | |
Director | |
| 6,667 | |
On
November 11, 2024, we issued Eugene M. Johnston, our Chief Financial Officer, 25,000 shares of common stock under the Company’s
Amended and Restated Mangoceuticals, Inc. 2022 Equity Plan as additional consideration to Mr. Johnston for services provided as Chief
Financial Officer.
Related
Party Agreements
Epiq
Scripts
On
September 1, 2022, and effective on August 30, 2022, we entered into a Master Services Agreement with Epiq Scripts, LLC, then 51% owned
and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer. Pursuant to the Master Services Agreement and a related statement
of work, Epiq Scripts agreed to provide for the online fulfillment, specialty compounding, packaging, shipping, dispensing and distribution
of products sold exclusively via our website that may be prescribed as part of a telehealth consultation on our platform. Epiq Scripts
also agreed to provide mail service pharmacy services to us on an exclusive basis during the term of the SOW. The Master Services Agreement
and SOW are described in greater detail under “Material Agreements-Master Services Agreement with Epiq Scripts”.
We
paid Epiq Scripts a total of $60,000 upon our entry into the Master Services Agreement, comprising $45,000 as a one-time non-refundable
technology systems setup and implementation fee and $15,000 as an upfront retainer to be credited towards the future provision of pharmacy
and related services as outlined and detailed in the Master Services Agreement and SOW. All costs related to the pharmacy services provided
by Epiq Scripts are listed as related party costs of revenues on our statement of operations.
Initial
Public Offering
On
March 23, 2023, we consummated our IPO of 1,250,000 shares of common stock at a price to the public of $4.00 per share, pursuant to that
certain Underwriting Agreement, dated March 20, 2023, between the Company and Boustead Securities, LLC, as representative of several
underwriters named in the Underwriting Agreement (“Boustead”). The Company received gross proceeds of approximately
$5 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company upon the sale
of the shares. In connection with the IPO, the Company also granted Boustead a 45-day option to purchase up to an additional 187,500
shares of its common stock, which expired unexercised
At
the same time, and as part of the same registration statement, but pursuant to a separate prospectus the Company registered the sale
of 4,765,000 shares of common stock, including 2,000,000 shares of common stock issuable upon the exercise of outstanding warrants to
purchase shares of common stock with an exercise price of $1.00 per share, of which warrants to purchase 975,500 shares of common stock
remain outstanding, and unexercised, as of the date of this prospectus.
As
additional consideration in connection with the IPO, we granted Boustead, the representative of the underwriters named in the Underwriting
Agreement for the IPO, warrants to purchase 87,500 shares of common stock with an exercise price of $5.00 per share, which are exercisable
beginning six months after the effective date of the registration statement filed in connection with the IPO (March 20, 2023) and expire
five years after such effectiveness date.
At
the same time, and as part of the same registration statement, but pursuant to a separate prospectus (the “Resale Prospectus”)
the Company registered the sale of 4,765,000 shares of common stock, including 2,000,000 shares of common stock issuable upon the exercise
of outstanding warrants to purchase shares of common stock with an exercise price of $1.00 per share, of which warrants to purchase 975,500
shares of common stock remain outstanding and unexercised.
As
additional consideration in connection with the IPO, upon the closing of the IPO, we granted Boustead, the representative of the underwriters
named in the Underwriting Agreement for the IPO, warrants to purchase 87,500 shares of common stock with an exercise price of $5.00 per
share, which are exercisable beginning six months after the effective date of the registration statement filed in connection with the
IPO (March 20, 2023) and expire five years after such effectiveness date.
Follow
On Offering
On
December 15, 2023, we entered into another underwriting agreement (the “Underwriting Agreement”) with Boustead, as representative
of the underwriters named on Schedule 1 thereto (the “Underwriters”), relating to a public offering of 4,000,000 shares of
the Company’s common stock to the Underwriters at a purchase price to the public of $0.30 per share and also granted to the Underwriters
a 45-day option to purchase up to 600,000 additional shares of its common stock, solely to cover over-allotments, if any, at the public
offering price less the underwriting discounts.
The
Follow On Offering closed on December 19, 2023. As a result, the Company sold 4,000,000 shares of its common stock for total gross proceeds
of $1.2 million.
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.
We
and our directors, executive officers, and shareholders holding 5% or more of our outstanding common stock previously agreed, in connection
with our IPO, subject to certain exceptions and without the approval of Boustead, not to offer, issue, sell, contract to sell, encumber,
grant any option for the sale of or otherwise dispose of any of our securities until March 20, 2024, and any directors or officers who
did not enter into a lock-up agreement in connection with our IPO entered into a lock-up agreement in connection with the Follow On Offering,
agreeing to not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our
securities for a period of 90 days after December 14, 2023.
On
December 19, 2023, pursuant to the Underwriting Agreement, the Company issued a common stock purchase warrant to Boustead for the purchase
of 280,000 shares of common stock at an exercise price of $0.38, subject to adjustments. The warrant is exercisable at any time and from
time to time, in whole or in part, until December 14, 2029, and may be exercised on a cashless basis.
On
January 18, 2024, the Underwriters notified the Company that they were exercising their over-allotment option in full to purchase an
additional 600,000 shares of common stock, which sale closed on January 22, 2024. The net proceeds to the Company from the sale of the
600,000 shares of common stock, after deducting underwriting discounts and expenses, was approximately $160,000. Inclusive of the full
exercise of the over-allotment option, a total of 4,600,000 shares of common stock were issued and sold in the Offering.
On
January 22, 2024, pursuant to the Underwriting Agreement, the Company also issued a common stock purchase warrant to Boustead for the
purchase of 42,000 shares of common stock at an exercise price of $0.375, subject to adjustments. The warrant is exercisable at any time
and from time to time, in whole or in part, until December 14, 2028, and may be exercised on a cashless basis.
Need
for Future Funding
As
discussed above, our current capital resources, combined with the net proceeds from the offering, are not expected to be sufficient for
us to fund operations for the next 12 months. We believe we will need funding in addition to the funding raised in our IPO and Follow
On Offering, to support our operations in the future. We may also seek to acquire additional businesses or assets in the future, which
may require us to raise funding. We currently anticipate such funding, if required, being raised through the offering of debt or equity.
Such additional financing, if required, may not be available on favorable terms, if at all. If debt financing is available and obtained,
our interest expense may increase and we may be subject to the risk of default, depending on the terms of such financing. If equity financing
is available and obtained it may result in our shareholders experiencing significant dilution. If such financing is unavailable, we may
be forced to curtail our business plan, which may cause the value of our securities to decline in value.
Critical
Accounting Policies and Estimates
The
preparation of the Company’s consolidated financial statements in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts
of assets, liabilities and expenses. “Note 2 - Summary of Significant Accounting Policies” to the audited consolidated
financial statements incorporated by reference, below describes the significant accounting policies used in the preparation of
the consolidated financial statements. Certain of these significant accounting policies and estimates have a higher degree of
inherent uncertainty and require significant judgments. Accordingly, actual results could differ from those estimates. To the extent
that there are differences between our estimates and actual results, our future financial statement presentation, financial condition,
results of operations and cash flows will be affected.
A
critical accounting policy is defined as one that is both material to the presentation of our consolidated financial statements
and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition
and results of operations. Specifically, critical accounting estimates have the following attributes: (1) we are required to make assumptions
about matters that are highly uncertain at the time of the estimate; and (2) different estimates we could reasonably have used, or changes
in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.
Estimates
and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience
and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new
events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor
and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of
our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes
that our consolidated financial statements are fairly stated in accordance with GAAP and present a meaningful presentation of
our financial condition and results of operations. We believe the following critical accounting policies reflect our more significant
estimates and assumptions used in the preparation of our consolidated financial statements:
Share-Based
Compensation - Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, which requires recognition
in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments
over the shorter of period the employee or director is required to perform the services in exchange for the award or the vesting period.
ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date
fair value of the award. Pursuant to ASC 505-50, for share-based payments to non-employees, compensation expense is determined at the
“measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached,
the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value
of the award at the reporting date. Additionally, we used this same methodology when determining the fair value of our restricted common
stock issuances to managers and other related parties.
Estimating
the Fair Value of Common Stock - We are required to estimate the fair value of the common stock underlying our stock-based awards
and warrants when performing the fair value calculations using the Black-Scholes option pricing model
Our
determination of the fair value of stock options with time-based vesting on the date of grant utilizes the Black-Scholes option pricing
model, and is impacted by our common stock price as well as other variables including, but not limited to, expected term that options
will remain outstanding, expected common stock price volatility over the term of the option awards, risk-free interest rates and expected
dividends. Estimating the fair value of equity-settled awards as of the grant date using valuation models, such as the Black-Scholes
option pricing model, is affected by assumptions regarding a number of complex variables. Changes in the assumptions can materially affect
the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require
significant analysis and judgment to develop.
Warrants
- In accordance with ASC 480, the Company classifies as equity any contracts that (i) require physical settlement or net-share
settlement or (ii) gives the Company a choice of net-cash settlement in its own shares. The Company classifies as liabilities any contracts
that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is
outside the control of the Company) or (ii) give the counterparty a choice of net-cash settlement or settlement in shares.
The
Company accounts for its currently issued warrants in conjunction with the Company’s ordinary shares in permanent equity. These
warrants are indexed to the Company’s stock and meet the requirements of equity classification as prescribed under ASC 815-40.
Warrants classified as equity are initially measured at fair value, and subsequent changes in fair value are not recognized so long as
the warrants continue to be classified as equity. The value of the warrant is based on accepted valuation procedures and practices that
rely substantially on the third-party professional’s use of numerous assumptions and its consideration of various factors that
are relevant to the operation of the Company.
JOBS
Act and Recent Accounting Pronouncements
The
JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected
to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised
accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no
longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act.
We
have implemented all new accounting pronouncements that are in effect and may impact our consolidated financial statements and
we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our
financial position or results of operations.
Recently
Issued Accounting Pronouncements
From
time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted
by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards,
which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption.
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 is currently evaluating the impact of ASU 2020-06 on its financial
statements.
Business
Overview
We
connect consumers to licensed healthcare professionals through our website at www.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, including our Mango ED and Mango GROW products.
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”) and hair growth products.
Mango
ED
We
have developed, and are commercially marketing and selling, a new brand of ED product under the brand name “Mango.” This
product is produced at a compounding pharmacy and is available to patients on the determination of a prescribing physician that the compounded
drug is necessary for the individual patient. This product currently includes the following three ingredients: either Tadalafil (the
active ingredient in Cialis) or Sildenafil (the active ingredient in Viagra) and Oxytocin, all of which are used in FDA approved drugs,
as well as L-Arginine, an amino acid that is available as a dietary supplement. However, the fact that Tadalafil and Oxytocin are used
in FDA approved drugs, and L-arginine is available as a dietary supplement, does not mean that these ingredients will prove safe when
combined into a single formulation to treat ED. We currently offer two dosage levels of our Mango ED product and anticipate doctors prescribing
a dosage based on the needs and medical history of the patient. Our Mango ED product currently includes the following amounts of the
three ingredients: (1) either Sildenafil (50 milligrams (mg)) or Tadalafil (10 (mg)), Oxytocin (100 International units (IU)) and L-Arginine
(50mg); and (2) either Sildenafil (100 milligrams (mg)) or Tadalafil (20mg), Oxytocin (100IU) and L-Arginine (50mg). Our Mango ED product
has not been, and will not be, approved by the FDA and instead we produce and sell our products, including our Mango ED product, under
an exemption provided by Section 503A of the FFDCA Act, as discussed below. Additionally, because our Mango ED product is being specially
compounded for the customer by a pharmacist with a physician’s prescription and because the ingredients for our Mango ED product
are publicly disclosed, this product formula can be replicated by other companies.
We
are not aware of any clinical studies involving (i) administration of Tadalafil or Sildenafil sublingually at the doses we provide patients,
or (ii) compounding of Tadalafil or Sildenafil, Oxytocin, and L-arginine to treat ED, similar to our Mango ED products. We are, however,
aware of other companies that are currently selling oral disintegrating tablets for ED, including those using a combination of Tadalafil
(the active ingredient in Cialis) and Sildenafil (the active ingredient in Viagra). We believe that the potential safety risks associated
with our Mango ED products are comparable to the safety risks associated with oral formulations of Tadalafil and Sildenafil approved
by the FDA for the treatment of ED. We do not expect significant safety risks associated with L-arginine, as the FDA has recognized in
its regulations that L-arginine may be safely added as a nutrient to foods. Clinical studies of intranasal Oxytocin have also found that
Oxytocin is generally safe and well-tolerated. Notwithstanding the above, because our ED product has not been, and will not be, approved
by the FDA, our product has not had the benefit of the FDA’s clinical trial protocol which seeks to prevent the possibility of
serious patient injury and death. If this were to occur, we could be subject to litigation and governmental action, which could result
in costly litigation, significant fines, judgments or penalties.
Launch
of Mango Hair Growth Product - ‘GROW’ by MangoRx
We
have developed, since November 16, 2022 are marketing, and selling, a new brand of hair growth product under the brand name ‘GROW’
by MangoRx (“Mango GROW”). This product is produced at our related party compounding pharmacy and is available to patients
on the determination of a prescribing physician that the compounded drug is necessary for the individual patient. Mango GROW currently
includes the following four ingredients - (1) Minoxidil (the active ingredient in Rogaine®) and (2) Finasteride (the active ingredient
in Propecia), each of which is used in FDA approved drugs, as well as (3) Vitamin D3 and (4) Biotin, which are available as dietary supplements.
However, the fact that Minoxidil and Finasteride are used in FDA approved drugs, and that Vitamin D3 and Biotin, are available as a dietary
supplement, does not mean that these ingredients will prove safe when combined into a single formulation to attempt to treat hair growth.
Mango GROW is encapsulated in convenient chewable, mint-flavored RDT’s.
We
currently offer one dosage level of our Mango GROW product and anticipate doctors prescribing Mango GROW based on the needs and medical
history of the patient. Our Mango GROW product currently includes the following amounts of the four ingredients discussed above: (1)
Minoxidil (2.5mg), (2) Finasteride (1mg), (3) Vitamin D3 (2000IU), and (4) Biotin (1mg). Our Mango GROW product has not been, and will
not be, approved by the FDA and instead we produce and sell our Mango GROW product and plan to produce and sell future pharmaceutical
products, under an exemption provided by Section 503A of the Federal Food, Drug, and Cosmetic Act.
We
are not aware of any clinical studies involving the administration of Minoxidil and Finasteride sublingually at the dose we provide patients,
or the compounding of Minoxidil, Finasteride, Vitamin D3, and Biotin, to treat hair growth, as is contemplated by our Mango GROW product.
We are, however, aware of other companies that are currently selling oral tablets for hair growth, including those using a combination
of Minoxidil and Finasteride. Additionally, because our Mango GROW product is being specially compounded for the customer by a pharmacist
with a physician’s prescription and because the ingredients for our Mango GROW product are publicly disclosed, this product formula
can be replicated by other companies.
Additional
Information Regarding Mango ED and Mango GROW
Because
our Mango ED and Mango GROW products have not been, and will not be, approved by the FDA, our products have not had the benefit of the
FDA’s clinical trial protocol which seeks to prevent the possibility of serious patient injury and death. If this were to occur,
we could be subject to litigation and governmental action, which could result in costly litigation, significant fines, judgments or penalties.
We
currently anticipate using a substantial portion of the net proceeds of this offering to finance marketing and general operational expenses
associated with the sale of our Mango ED and Mango GROW products. We launched our website in mid-November 2022. To date, we have sold
only a small amount of products and generated only minimal revenues.
Mango
ED and Mango GROW have been formulated as RDT using a sublingual (applied under the tongue) delivery system to bypass the stomach and
liver. It is a generally established principle that sublingual drug absorption through the oral mucosa is generally faster than drug
absorption through the gastrointestinal tract. This is because sublingual drugs that are absorbed through the oral mucosa directly enter
the systemic circulation, bypassing the gastrointestinal tract and first-pass metabolism in the liver (see H. Zhang et al., Oral mucosal
drug delivery: clinical pharmacokinetics and therapeutic applications, 41 Clin Pharmacokinet
661, 662 (2002). Though the active ingredients that comprise our Mango ED product are meant to treat ED - an issue that according
to a 2018 study published in The Journal of Sexual Medicine has been estimated to affect over one-third of today’s men’s
population (with prevalence increasing with age) - we are also aiming to brand ourselves as a lifestyle company marketed to men seeking
enhanced sexual vitality, performance, and overall mood and confidence, together with our Mango GROW product.
Our
Mango products are sold exclusively online via our website at www.MangoRX.com.
Our
Contracted Telehealth Provider
In
many states, including Texas where our principal business office is located, the corporate practice of medicine doctrine prohibits corporations
from practicing medicine and from employing physicians to provide professional medical services. Many states that recognize this doctrine
also prohibit physicians from agreeing to share the fees they receive for professional services with unlicensed entities or individuals,
a practice that is commonly known as “fee splitting.” The requirements for compliance with any applicable corporate practice
of medicine and fee splitting restrictions vary among the states. In Texas, for example, there is no statute that expressly prohibits
fee splitting, but the corporate practice of medicine doctrine has been interpreted to prohibit physicians from ceding control over their
fee structures to corporate entities or giving a substantial portion of the fees received to corporate entities.
In
order to comply with corporate practice of medicine and fee splitting restrictions, we do not employ or directly contract with individual
physicians or physician groups, nor do we control their medical decision-making or charges. Rather, on August 1, 2022, we entered into
a Physician Services Agreement (the “Physicians Agreement”) with BrighterMD, LLC doing business as Doctegrity (“Doctegrity”),
as discussed in further detail below under, which has agreed to make available to us, healthcare professionals, to allow them to provide
clinical services directly to our future customers via telehealth. We have integrated these healthcare professionals to allow for telehealth
consultations and related services on our Mangoceuticals platform which has been developed and is complete. This platform is the backbone
of our business as it connects consumers with both the medical provider and the pharmacy for fulfillment. It is also the system that
we will use to create marketing funnels for outgoing marketing, customer management and support, and analytics for future sales.
Through
our Physician Services Agreement with Doctegrity (as defined below), the healthcare professionals are responsible for the practice of
medicine and control of the clinical decision-making.
Our
Related Party Pharmacy
As
discussed in greater detail below under “-Material Agreements-Master Services Agreement with Epiq Scripts” and “-First
Amendment to MSA,” we have entered into an exclusive Master Services Agreement and statement of work with Epiq Scripts, LLC (“Epiq
Scripts”), for its specialty compounding and packaging capabilities, fulfillment, and distribution of certain prescription products
available through our platform. These prescription products include our Mango ED and Mango GROW products. Epiq Scripts is a related party
because it was 51%-owned by American International at the time of our entry into the Master Services Agreement and is currently 51% owned
by Mr. Cohen, our Chairman and Chief Executive Officer. Mr. Cohen, our Chairman and Chief Executive Officer, also served as the Chief
Executive Officer and a director of, and had voting control over, American International at the time of the entry into the Master Services
Agreement. As discussed under “Company Information and Formation,” our company was wholly-owned by American International
until April 16, 2022, when control of our company was sold to Cohen Enterprises, which is owned by Mr. Cohen. Epiq Scripts is a relatively
newly formed entity, having been formed in January 2022, and only began compounding drugs for patients in November 2022. On February
15, 2023, the 51% of Epiq Scripts then owned by American International was transferred to Mr. Cohen as part of an exchange transaction,
whereby Mr. Cohen agreed to cancel his preferred stock of American International, which provided him voting control over American International,
in exchange for among other assets, American International’s ownership of Epiq Scripts. As a result, Epiq Scripts is currently
51% owned by Mr. Cohen, our Chairman and Chief Executive Officer. Additionally, Mr. Cohen has served as the co-Manager of Epiq Scripts
since January 2022.
Epiq
Scripts is currently fully licensed with the Texas State Board of Pharmacy (“TSBP”) and further has State Board of
Pharmacy (or its equivalent) licenses from the District of Columbia and all other states except for Alabama (Epiq Scripts intends to
obtain a state license from Alabama by the end of the second quarter of 2025). Epiq Scripts has obtained its National Provider Identifier
(“NPI”) number and is now a member of the National Council for Prescription Drug Programs (“NCPDP”),
a standards development organization. Additionally, Epiq Scripts has applied for the highest level of accreditation with the Utilization
Review Accreditation Commission (“URAC”), a Washington DC-based healthcare accrediting organization that establishes
quality standards for the entire healthcare industry. Although Epiq Scripts is physically located in Texas, it can ship products to customers
in all states (except Alabama).
Our
Customer Portal
Our
customer platform connects consumers to licensed healthcare professionals through our website at www.MangoRX.com, for the provision
of care via telehealth and also provides access for customers to a licensed pharmacy for online fulfillment and distribution of certain
medications that may be prescribed as part of telehealth consultations. Additional features to this backend technology solution allow
for the creation and management of customer accounts whereby customers have the ability to login, view and make changes to their respective
accounts. These changes include, but are not limited to, reviewing order history, tracking order shipments, requesting and ordering product
refills and making other profile changes such as shipping address and payment changes. Our portal is not unique to the industry and is
not anticipated to be difficult or costly to replicate or replace.
The
backend technology solution also houses and manages all customer data allowing the Company with additional key functionality, including
but not limited to, providing customer service and support and data analytics for various marketing initiatives and reporting functions.
We
do not anticipate selling any third-party products via our portal.
Our
Growth Strategy
Utilize
a variety of marketing channels using data analytics to attract customers
We
currently market and advertise our Mango ED and Mango GROW products on a variety of advertising mediums including, but not limited to,
social media, online search websites, podcasts, television, radio, out-of-home, and other media channels, in compliance with applicable
FDA rules and requirements. However, due to such rules and requirements, we are extremely limited in the content of the claims and promotional
statements that we are able to make regarding our products under applicable FDA regulations. We believe advertising in a diversified
set of media channels is important to prevent overreliance on any single channel and to maximize the exposure of our brand to our desired
customers. We also intend to reach customers through our own social media accounts, press coverage and public relations, internally developed
educational and lifestyle content, and through engagement of social media influencers, hired and paid celebrities and talent, and physical
brand advertising campaigns, in each case funding permitting, and in each case subject to applicable rules and regulations, which are
expected to significantly limit the content of such marketing materials. We believe that this overall strategy will drive significant
customer traffic to our platform, including direct type-in traffic and organic online search traffic.
We
also intend to utilize a marketing strategy focused on analytics and data. We are designing our internal systems to measure consumer
behavior, including which types of consumers generate more revenue in their first purchase, generate more revenue over time, generate
more gross profit from their purchases, and which types of consumers are most valuable over their lifetime. We also plan on measuring
the effectiveness of our marketing budgets and the rate of return we generate from our marketing campaigns. We have retained and plan
on using an outside marketing and advertising firm to assist management in identifying marketing and advertising campaigns, media purchases
and mediums, and seeking to drive a sufficient rate of return from our marketing and advertising budgets.
Invest
in our telemedicine platform to enable sales throughout the United States
We
utilize both a synchronous and asynchronous approach through our telemedicine platform, connecting customers through our platform and
contracted physicians and pharmacy. An asynchronous visit allows a physician to verify the patient’s identity, demographics and
collect the medical history online without needing to physically see or speak to the patient. A synchronous visit requires the doctor
to either speak directly to the patient and/or see the patient either via video conference or in person. As discussed above, we initially
are focusing our sales in the District of Columbia and 47 states where our related party pharmacy is licensed, with the goal of eventually
undertaking sales across all 50 states, pending licensing approvals of our related party pharmacy.
Provide
subscription plans for recurring revenue and introduction of new products
We
provide our customers with an option to purchase our Mango ED and Mango GROW products on a subscription basis. Subscription plans provide
an easy and convenient way for customers to get ongoing treatment while simultaneously providing the Company with predictability through
a recurring revenue stream.
For
subscription plans, customers are able to select a desired timeframe in which to receive products, which range from once every month
to once every six months. The customer will then be billed on a recurring basis based on the selected timeframe and specified quantity
of product, which is shipped after each billing from our contracted pharmacy (Epiq Scripts). Customers are able to cancel subscriptions
in between billing periods to stop receiving additional products and reactivate subscriptions. Our integrated technology platform serves
customers from customer discovery, through the purchase of products on our website, to connecting customers with medical providers for
telehealth consultations (through our contracted physician network), to the fulfillment and delivery of orders (through our contracted
pharmacy), and finally through ongoing management by medical providers (also through our contracted physician network). We believe our
platform provides us cost advantages and efficiencies to offer customers affordable prices and generate increased revenues over time.
In
addition to our Mango ED and Mango GROW products, we intend to launch new products over time and offer additional subscription-based
offerings which we hope will result in growth in revenue through recurring revenue streams.
Market
Overview
The
Market for ED Products
According
to a January 2022 report published by Verified Market Research, the Global Erectile Dysfunction Drugs Market size was valued at $3.63
billion in 2020, mainly due to the increase in patient awareness and the early adoption of sedentary lifestyle. Verified Market Research
also projects that the total Global Dysfunction Drugs Market size will contract to $2.95 billion in 2028. The expected reason for this
contraction is poor patient compliance with erectile dysfunction drugs and the future availability of cost-effective imitation medicines,
as well as side effects of ED drugs. We do not anticipate our Mango ED drug suffering from these limitations, as we believe our product
is easy to use and that we have priced our product competitively. Separately, Grand View Research, in a July 2022 report, projects that
the U.S. market (where we are initially marketing our ED product) for erectile dysfunction drugs estimated at approximately $1.1 billion
as of 2021, will increase at a 7.4% compound annual growth rate though 2030.
It
is also estimated that nearly 3-in-5 men in the US have suffered from erectile dysfunction, according to a survey reported in February
2022, by LetsGetChecked, a leading at-home health screening and insights company (based on research carried out by Opinium Research among
2,006 men in the USA, 1,178 of whom had previously experienced erectile dysfunction, from February 7-10, 2020). According to that study,
age isn’t that big a factor either, with 56% of men 18 to 34 years old being affected, compared to 63% of those over the age of
55. The study also determined that most men blame psychological factors for ED - with 41% blaming stress, 34% blaming having “too
much on their mind,” and 31% believing it is performance anxiety.
The
Market for Mango GROW
According
to the website of the American Hair Loss Association, (a) two-thirds of American men will experience some degree of hair loss by the
age of 35, (b) by age 50, around 85 percent of men have significantly thinning hair; and (c) for around 25% of men, the start of male
pattern baldness can begin before the age of 21. Additionally, and contrary to societal belief, we believe that most men who suffer from
male pattern baldness are unhappy with their situation and would take steps to change that. In our experience, hair loss affects every
aspect of the hair loss sufferer’s life including interpersonal relationships as well as the professional lives of those suffering.
According
to a May 2022 market study entitled, “Hair Loss Prevention Products Market Forecast to 2028 - COVID-19 Impact and Global Analysis
- by Product Type (Shampoos and Conditioners, Oils, Serums, and Others), Category (Natural & Organic, and Conventional), End User
(Men, Women, and Unisex), and Distribution Channel (Supermarkets and Hypermarkets, Convenience Stores, Online Retail, and Others)”,
by The Insight Partners, the hair loss prevention products market size was valued at $23.6 billion in 2021 and is projected to reach
$31.5 billion by 2028, growing at a projected compound annual growth rate of 4.2% from 2021 to 2028.
Mordor
Intelligence LLP believes that the major factors driving the hair loss prevention market are changing lifestyle patterns, adoption of
a hectic schedule that increases stress levels, which in turn results in frequent hair loss at an earlier stage among the young population,
growing disposable income, and increased emphasis on appearances.
Competition
and Competitive Advantages
We
mainly compete with other companies offering men’s wellness products, including Hims & Hers Health, Inc. and Roman, and with
our Mango ED products, we compete against much larger pharmaceutical companies who offer ED branded drugs like Viagra (Pfizer) and Cialis
(marketed by Lilly ICOS LLC, a joint venture between Eli Lilly and Company and ICOS Corporation) and their generic forms. With our Mango
GROW product, we compete against the much larger pharmaceutical company Merck & Co., which offers the branded hair loss product Propecia,
and Johnson & Johnson, the owner of Rogaine® - a branded form of Minoxidil. These companies have much greater resources than
we do and well-known brand names.
Our
future men’s wellness products will also likely need to compete against other traditional healthcare providers, pharmacies, and
large retailers that sell non-prescription products.
Furthermore,
we compete with other companies, which have greater resources and a greater advertising budget, and which are also selling ED related
products with either or both Tadalafil and Sildenafil (or similar products), in an oral disintegrating tablet and who are selling compounded
Minoxidil and Finasteride in both topical form (e.g., gels, foams, liquid solutions) and in oral capsule, tablet or pill form. For example,
we are aware of other companies that are currently selling oral disintegrating tablets for ED, including those using a combination of
Tadalafil and Sildenafil (the active ingredient in Viagra). However, we are not aware of any companies that are selling a compound consisting
of Minoxidil and Finasteride in an oral disintegrating tablet form.
We
compete against these competitors based on our branding, advertising, unique compounding, and product delivery system (i.e., our Mango
ED and Mango GROW products have been designed to be taken sublingually, rather than in pill form).
Relative
to other online direct to consumer telemedicine companies that are selling both generic ED medication and generic hair loss medications,
we believe we have priced both our Mango ED products and Mango GROW product at a premium, due to the cost of compounding the product
and the use of multiple ingredients. We are currently aware of a handful of other direct to consumer companies that are also selling
compounded hair loss and ED medications and who are selling their products at a higher price than Mango’s current price. When comparing
the current market for various pharmaceutical related hair loss and ED products, we have attempted to position our pricing to be slightly
above average as we anticipate marketing our Mango ED and Mango GROW products to a demographic that we expect will pay a premium for
what we believe to be a premium product relative to the competition for the treatment of hair loss and erectile dysfunction.
Regulatory
Environment
We
currently produce and sell our Mango ED and Mango GROW products, and plan to produce and sell future pharmaceutical products, under an
exemption provided by Section 503A of the Federal Food, Drug, and Cosmetic Act (“FFDCA Act”). Section 503A describes the
conditions under which compounded human drug products are exempt from the FFDCA Act sections on FDA approval, prior to marketing, current
good manufacturing practice (“cGMP”) requirements and labeling with adequate directions for use. One of these conditions
is that the drugs must be compounded based on the receipt of valid patient-specific prescriptions; another condition limits “copying”
of FDA-approved products, which restricts compounding drugs that have the same active ingredients and route of administration as ingredients
that are used in other FDA approved drugs which are commercially available. The FDA also prohibits any marketing or promotional statements
that are “false or misleading in any particular,” including making any unsupported superiority claims against other products
or the failure to disclose a material fact.
Notwithstanding
the above, under relevant FDA guidance, the FDA generally does not consider a compounded drug to be “essentially a copy”
of a commercially available drug if the compounded drug has a different route of administration as compared with the approved alternative,
and our Mango ED and Mango GROW products are for a different route of administration (e.g., sublingual). In addition, the FDA does not
consider a compounded drug to be “essentially a copy” of a commercially available drug if the approved product cannot be
used for the prescribed route of administration, which is available in the compounded version (which we believe it cannot, as discussed
below). Finally, we do not expect that we will be deemed to have engaged in such “copying”, because our Mango ED and Mango
GROW products are based on a prescriber’s determination for each patient that the change associated with the compounded product
(our Mango ED and Mango GROW products) produces for the patient a significant difference as compared with the commercially available
drug product. Under relevant FDA guidance, the FDA does not consider a compounded drug “essentially a copy” if a prescriber
determines that there is a change, made for an identified individual patient, which produces for that patient a significant difference
from the commercially available product.
Under
Section 503A of the FFDCA Act, it is the prescribing practitioner who determines if a compounded drug is necessary for the identified
patient and whether the change associated with the compounded product produces for the patient a significant difference as compared with
the commercially available drug product. FDA’s guidance states that FDA generally does not intend to question prescriber determinations
that are appropriately documented. Our Mango ED and Mango GROW compounded products have been formulated as a Rapid Dissolve Tablet using
a sublingual (applied under the tongue) delivery system to bypass the stomach and liver. We believe this offers a significant difference
based on the fact that the approved versions are not available in the same route of administration (i.e., sublingual). A sublingual formulation
may be able to meet the clinical needs of a particular patient who desires a more rapid onset of action compared to an FDA-approved oral
formulation. In addition, because the prevalence of ED generally increases with age, older patients who may have difficulty swallowing
an FDA-approved oral formulation may benefit from a sublingual formulation that dissolves under the tongue.
Compounded
drugs, like our Mango ED and Mango GROW products, are not FDA-approved. This means that the FDA does not verify the safety or effectiveness
of such drugs. Instead, consumers rely on the determination of a prescribing physician that the compounded drug is necessary for the
individual patient. Compounded drugs also lack an FDA finding of manufacturing quality before such drugs are marketed.
The
FDA has the authority to impose significant restrictions on products through regulations on advertising, promotional and distribution
activities. In particular, the FDA will object to any promotional activity (including through testimonials and surrogates) that is “false
or misleading in any particular,” including the failure to disclose material facts. For example, the FDA will expect adequate substantiation
for an efficacy claim, which would require substantial evidence derived from adequate and well-controlled clinical trials. We believe
we can conduct truthful and non-misleading promotional activities, including activities involving the use of testimonials and surrogates,
with limited claims that do not require substantial evidence derived from adequate and well-controlled clinical trials and which do not
include efficacy claims.
We
are also aware of data in the scientific literature supporting how the proposed combination of the compounds which make up our Mango
ED products (i.e., Tadalafil or Sildenafil, Oxytocin, and L-arginine) might be expected to perform in ED patients. Previous clinical
studies (none of which we have paid for or undertaken ourselves) have suggested that either Sildenafil Tadalafil and L-arginine in combination
for treatment of ED may be more effective than either compound alone (see L. Gallo et al., The Daily Therapy With L-Arginine 2,500
mg and Tadalafil 5 mg in Combination and in Monotherapy for the Treatment of Erectile Dysfunction: A Prospective, Randomized Multicentre
Study, 8 Sex Med 178, 184 (June 2020) - finding that in general, combination therapy
with Tadalafil and L-Arginine was superior to monotherapies for the treatment of ED; and M. Abu El-Hamd & E. Mohammed Hegazy, Comparison
of the clinical efficacy of daily use of L-arginine, tadalafil and combined L-arginine with tadalafil in the treatment of elderly patients
with erectile dysfunction, 52 Andrologia e13640, 3 (Aug. 2020) (“Hamd and Hegazy”)
- finding that the combined daily use of L-arginine with Tadalafil therapy for elderly male patients with ED could significantly increase
Sexual Health Inventory for Men (SHIM) scores and levels of total testosterone in comparison to L-arginine, or Tadalafil alone)-This
is because L-arginine may increase nitric oxide, that in turn may increase cyclic guanosine monophosphate, which has relaxation and vasodilation
(dilatation of blood vessels) effects on smooth muscle to assist in the treatment of ED (see Hamd and Hegazy paper). Furthermore, Oxytocin
is a neurotransmitter linked to increased levels of social interaction, well-being, and anti-stress effects and clinical studies suggest
administration of Oxytocin may stimulate certain aspects of social interaction, and may cause anti-anxiety and anti-stress effects (see
Hamd and Hegazy paper).
Furthermore,
we are aware of data in the scientific literature supporting the efficacy of Minoxidil as an oral treatment (as discussed below), as
opposed to topical treatments that have been more traditionally used and marketed for hair growth to date. Topical Minoxidil and oral
Finasteride are current the standard first-line treatments for androgenetic alopecia (AGA)(male pattern baldness). Minoxidil in an oral
formulation has been previously used for the treatment of severe and uncontrolled hypertension at a dose of 10-40 mg. Unintentionally,
the early trials of oral minoxidil as an antihypertensive drug documented side effects such as hypertrichosis (excessive hair growth
anywhere on the body) and hirsutism (excess hair most often noticeable around the mouth and chin) with chronic use. A study conducted
by Ratchathorn Panchaprateep & Suparuj Lueangarun, and published in the September 24, 2020 edition of Dermatology and Therapy, found
that oral minoxidil at a dose of 5 mg taken once daily, significantly increased hair growth in men with AGA after 12 and 24 weeks of
treatment (Panchaprateep, R., Lueangarun, S. Efficacy and Safety of Oral Minoxidil 5 mg Once Daily in the Treatment of Male Patients
with Androgenetic Alopecia: An Open-Label and Global Photographic Assessment. Dermatol Ther (Heidelb) 10, 1345-1357 (2020)).
Separately,
Finasteride taken orally in the amount of 1 mg per day has shown to promote scalp hair growth and prevent further hair loss in a significant
proportion of men with male pattern hair loss (McClellan, K.J., Markham, A. Finasteride. Drugs 57, 111-126 (1999)).
Neither
we, nor our representatives have had any conversations with the FDA staff regarding whether our Mango ED and Mango GROW products can
be sold pursuant to Section 503A of the FFDCA Act and future conversations with the FDA may result in the FDA staff raising issues with
such sales pursuant to Section 503A of the FFDCA, requiring certain pre-requisites or changes to our current business plan, which may
be costly or time consuming, and/or may result in us being prohibited from selling our Mango ED and Mango GROW products pursuant to Section
503A of the FFDCA Act.
Government
Regulation
We,
as are many other companies, are also subject to environmental laws, rules and regulations which could affect our operations, including
those disclosed below. As a consumer-focused health and wellness company delivering comprehensive telehealth technologies and services
and health and wellness prescription-based products, in addition to the typical legal and regulatory considerations faced by a technology-based
company, we are required to comply with complex healthcare laws and regulations, and consumer protection laws and regulations, all at
both the state and federal level. Our business and operations are subject to extensive regulation, including with respect to the practice
of medicine, the use of telehealth, relationships with healthcare providers, privacy and security of personal health information, product
safety and pharmacy operations.
Government
regulation of healthcare generally
Generally
speaking, the healthcare industry is one of the most highly regulated industries in the United States. Healthcare-related businesses
are subject to a broad array of governmental regulation at the federal, state, and local levels. While portions of our business are subject
to significant regulations, some of the more well-known healthcare regulations do not apply to the Company because of the way our current
operations are structured. We currently accept payments only from our customers-not any third-party payors, such as government healthcare
programs or health insurers. Because of this approach, we are not subject to many of the laws and regulations that impact other participants
in healthcare industry. If we begin accepting reimbursement payments from insurance providers or other third-party payors such as a government
program, we will become subject to some of these additional healthcare laws and regulations.
Irrespective
of our business model, the healthcare industry is subject to changing political, economic and regulatory influences that may affect health
and wellness companies like the Company. During the past several years, the healthcare industry has been subject to an increase in governmental
regulation and subject to potential disruption due to legislative initiatives and government regulation, as well as judicial interpretations
thereof. While these regulations may not directly impact us or our offerings in any given case, they will affect the healthcare industry
as a whole and may impact customer use of the Company’s solutions. If the government asserts broader regulatory control over companies
like us or if we accept payment from and/or participate in third-party payor programs in the future, the complexity of our operations
and our compliance obligations will materially increase.
Government
regulation of the practice of medicine and telehealth
The
practice of medicine is subject to various federal, state, and local certification and licensing laws, regulations, approvals and standards,
relating to, among other things, the qualifications of the provider, the practice of medicine (including specific requirements when providing
health care utilizing telehealth technologies and the provision of remote care), the continuity and adequacy of medical care, the maintenance
of medical records, the supervision of personnel, and the prerequisites for the prescription of medication and ordering of tests. Because
the practice of telehealth is relatively new and rapidly developing, regulation of telehealth is evolving and the application, interpretation
and enforcement of these laws, regulations and standards can be uncertain or uneven. Similarly, the ability of our related party pharmacy
to fulfill prescriptions and distribute pharmaceutical products, including compounded pharmaceutical products, is dependent upon the
laws that govern licensed pharmacies and the fulfillment and distribution of prescription medication and other pharmaceutical products,
which include in some cases requirements relating to telehealth. As a result, we must continually monitor legislative, regulatory, and
judicial developments regarding the practice of medicine, telehealth and pharmaceutical laws in order to support our related party pharmacy
(Epiq Scripts) and our third-party Telemedicine Providers.
Physicians
who provide professional clinical services via telehealth must, in most instances, hold a valid license to provide the applicable professional
services in the state in which the patient is located. As such, the physicians provided to us through our relationship with our Telemedicine
Providers are required to be licensed under applicable state law.
Additionally,
there may be limitations placed on the modality through which telehealth services are delivered. For example, some states specifically
require synchronous (or “live”) communications and restrict or exclude the use of asynchronous telehealth modalities,
which is also known as “store-and-forward” telehealth. However, other states do not distinguish between synchronous
and asynchronous telehealth services. In response to the COVID-19 pandemic, some state and federal regulatory authorities lowered certain
barriers to the practice of telehealth in order to make remote healthcare services more accessible. Due to our business model, these
changes did not dramatically change our operations, but these changes did introduce many people to the practice of telehealth. It is
unclear whether these changes will have a long-term impact on the adoption of telehealth services by the general public or legislative
and regulatory authorities.
Some
of the rules and regulations we expect to be subject to include:
Federal
Anti-Kickback Statute
The
Federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) is broadly worded and prohibits the knowing and willful offer, payment, solicitation
or receipt of any form of remuneration in return for, or to induce, (i) the referral of a person covered by Medicare, Medicaid or other
governmental programs, (ii) the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid
or other governmental programs or (iii) the purchasing, leasing or ordering or arranging or recommending purchasing, leasing or ordering
of any item or service reimbursable under Medicare, Medicaid or other governmental programs. In addition, a person or entity does not
need to have actual knowledge of this statute or specific intent to violate it to have committed a violation. Moreover, the government
may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent
claim for purposes of the False Claims Act, we do not expect to apply to our operations as we do not plan to seek payment for our services
from the federal government. Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental
programs as well as civil and criminal penalties and fines. Imposition of any of these remedies could have a material adverse effect
on our business, financial condition and results of operations.
We
do not anticipate our current operations being subject to the Anti-Kickback Statute as we do not seek reimbursement under a federal health
care program.
U.S.
Food and Drug Administration (“FDA”) Regulation
The
FDA regulates product promotion and noncompliance and this could result in the FDA requesting that we modify our product promotion or
subject us to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine,
and criminal penalties. Other federal, state or foreign enforcement authorities also monitor product promotion and have the authority
to levy significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement, if
violations of applicable law or regulations occur. We also believe that the FDA will likely consider our compounded combination product
to be different from previously FDA-approved products, and that the FDA will not likely allow us to rely on any FDA-approved labeling
or prescribing information.
To
qualify for the exemptions under section 503A of the FFDCA Act, among other requirements, a drug must be compounded by a licensed pharmacist
or a licensed physician that does not compound regularly or in inordinate amounts any drug products that are essentially copies of a
commercially available drug product. As discussed under “Business-Material Agreements-Master Services Agreement with Epiq Scripts”,
we have entered into an agreement with Epiq Scripts, a related party, 52% owned and controlled by Jacob D. Cohen, our Chairman and Chief
Executive Officer, to provide us compounding and other pharmacy services.
Our
operations are subject to extensive government regulation, from the entry into agreements with physicians or groups of physicians to
provide telehealth services to our potential customers, to the marketing and promotion of our products, the creation of our products,
and the sale of our products through licensed pharmacists.
Risk
of Litigation
Additionally,
federal and state statutes provide for private causes of action to plaintiffs alleging misleading marketing claims, or otherwise making
allegations which are found to be in violation of such laws. As such, misleading promotional statements and practices can lead to litigation
under state consumer protection and unfair trade practices laws. To date, there has been a substantial amount of litigation under these
laws challenging the marketing and sale of compound drugs and we may face legal actions, and be subject to significant penalties, judgments
and damages, if we are found to have violated these laws.
Health
Information Privacy and Security Laws
Numerous
U.S. state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability,
integrity, and other processing of health information. We believe that, because of our operating processes, we are not a covered entity
or a business associate under the Health Insurance Portability and Accountability Act and the implementing regulations (“HIPAA”),
which establishes a set of national privacy and security standards for the protection of protected health information by health plans,
healthcare clearinghouses, and certain healthcare providers, referred to as covered entities, and the business associates with whom such
covered entities contract for services. Because we need to use and disclose customers’ health and personal information in order
to provide our services, we develop and maintain policies and procedures to protect that information in the future.
In
addition to HIPAA, numerous other federal, state, and foreign laws and regulations protect the confidentiality, privacy, availability,
integrity and security of health information and other types of personal information. These laws and regulations are often uncertain,
contradictory, and subject to changing or differing interpretations. Additionally, these laws may be similar to or even more protective
than, and may not be preempted by, HIPAA and other federal privacy laws. The privacy and data protection laws in many states in which
we operate are more restrictive than HIPAA and/or may apply more broadly than HIPAA. In certain cases, it may be necessary to modify
our operations and procedures to comply with these more stringent state laws. Not only may some of these state laws impose fines and
penalties upon violators, but also some, unlike HIPAA, may afford private rights of action to individuals who believe their personal
information has been misused. We expect new laws, rules and regulations regarding privacy, data protection, and information security
to be proposed and enacted in the future; as state laws are changing rapidly.
For
example, as of the date of this prospectus, eleven states-California, Colorado, Connecticut, Iowa, Indiana, Tennessee, Montana, Texas,
Utah, Virginia and Oregon-have enacted consumer data privacy laws. The data privacy laws have a number of things in common with each
other, including allowing residents of those states the right to access and delete their personal information and to opt-out of the sale
of their personal information, among others. Other provisions require commercial websites or online services to post a privacy policy
that describes the types of personal information collected, what information is shared with third parties, and how consumers can request
changes to certain information. Our compliance with these and future rules may increase our operating and expenses and our failure to
comply with these rules could subject us to fines, penalties and litigation.
In
addition to the above, proposed or new legislation and regulations could also significantly affect our business. There currently are
a number of proposals pending before federal, state, and foreign legislative and regulatory bodies.
Product
Liability
As
a distributor of men’s health and wellness products, the Company faces an inherent risk of exposure to product liability claims,
regulatory action and litigation if its future products are alleged to have caused significant loss or injury. In addition, the sale
of our products involves the risk of injury to consumers due to tampering by unauthorized third parties or product contamination. Previously
unknown adverse reactions resulting from human consumption of our products alone or in combination with other medications or substances
could occur. We may be subject to various product liability claims, including, among others, that our future products caused injury or
illness, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with
other substances. A product liability claim or regulatory action against the Company could result in increased costs, could adversely
affect our reputation with our clients and consumers generally, and could have a material adverse effect on our results of operations
and financial condition of the Company.
For
example, a 2014 study published in The Journal of the American Medical Association determined that Sildenafil (the active ingredient
in Viagra) may be associated with a higher risk of developing melanoma. The study evaluated data from more than 25,000 men who used Sildenafil
and found that Sildenafil use was significantly associated with an increased risk of subsequent melanoma, after considering other risk
factors. It is possible that the ingredients we use in our Mango ED and Mango GROW products or any other products we sell in the future
could be found in the future to result in increases in the likelihood of developing cancer or other diseases, which could subject us
to litigation, penalties or recalls.
Insurance
We
have an insurance policy in effect that includes customary coverage and protection for professional liability, general liability, employee
benefits and protection against claims including technology products, services and against cyber security. Our insurance policy also
covers exposure to product liability claims, including both technology product claims related to customer data breaches, copyright infringement
and/or misrepresentation and fraud and any claims made in connection with any physical products and services sold through the Company’s
website.
Material
Agreements
We
contract with individual physicians or physician groups, nor do we control their medical decision-making or charges. Rather, the Company
has entered into the Physicians Agreements with the Telemedicine Providers, all of which counterparties have agreed to make available
to us, healthcare professionals, to allow them to provide clinical services directly to our future customers via telehealth. We have
integrated these healthcare professionals to allow for telehealth consultations and related services on our Mangoceuticals platform which
has been developed and is complete. This platform is the backbone of our business as it connects consumers with both the medical provider
and the pharmacy for fulfillment. It is also the system that we will use to create marketing funnels for outgoing marketing, customer
management and support, and analytics for future sales.
Through
our Physician Agreements, the healthcare professionals are responsible for the practice of medicine and control of the clinical decision-making.
After
a patient visits our website and submits a request for a consultation with a health care professional, our Telemedicine Providers communicate
the patient’s information to one of their affiliated physicians. The Telemedicine Providers and their physicians are responsible
for conducting the telehealth consultation and any ongoing communication with the patient in accordance with applicable laws. The physicians
make a determination, in their sole discretion, as to whether or not to prescribe our Pharmaceutical Products to potential customers.
If the physicians prescribe our Pharmaceutical Products, then the customers pay us for our products. In turn, Epiq Scripts, LLC, pursuant
to the Master Services Agreement discussed below, is provided information on the customer and compounding of our product, compound the
product, and ship the product to customers using packaging and shipping materials which we supply.
We
pay the Telemedicine Providers for each physician visit conducted in response to request made by a patient on our website, regardless
of whether the physician prescribes our product to the patient. The fee we pay the Telemedicine Providers is fixed, set in advance and
is negotiated at arms’ length after comparing the prices offered by similar services. We are not a party to any contracts between
the Telemedicine Providers and any health professionals or physician groups and do not control how the Telemedicine Providers reimburse
these providers.
Although
our arrangement with the Telemedicine Providers, as summarized above, is structured to comply with applicable laws, including those restricting
the corporate practice of medicine and fee splitting, there may be a risk that a state agency, now or in the future as these laws (and
interpretations of them) evolve, would conclude that the arrangement and fee structure between the Telemedicine Providers and their contracted
physicians and/or our agreements with the Telemedicine Providers violate the corporate practice of medicine doctrine and fee splitting
restrictions in Texas or in another state where a patient who uses our Mangoceuticals platform is located.
The
Telemedicine Providers’ physicians are tasked with determining whether patients seeking our Pharmaceutical Products are eligible
to be prescribed our Pharmaceutical Products, with the sole purpose of the telemedicine engagement being for the determination, in the
physician’s sole judgment, of whether the patient is qualified to obtain a prescription for the Pharmaceutical Products. The Telemedicine
Providers’ physicians are required to electronically send prescriptions to Epiq Scripts (the Company’s designated and accredited
pharmacy partner), which financial relationship is required to be disclosed in writing to the patient via the Terms and Conditions listed
on the Company’s website, including informed consent, and also informing the patient that the prescription is sent to the Company’s
designated pharmacy partner. The Telemedicine Providers’ physicians are only able to prescribe our Pharmaceutical Products to patients
seeking help for the treatment which the specific product provides (for example, Mango ED for treatment for ED and GROW for treatment
hair loss) through our customer portal.
Master
Services Agreement with Epiq Scripts
On
September 1, 2022, and effective on August 30, 2022, we entered into a Master Services Agreement with Epiq Scripts, which at the time
was 51%-owned by American International. Mr. Cohen, our Chairman and Chief Executive Officer, served as the Chief Executive Officer and
a director of, and had voting control over, American International at the time of the entry into the Master Services Agreement, and currently
serves on the Board of Directors of American International. As discussed above under “-Formation and Transfer of Control,”
the Company was wholly-owned by American International until June 16, 2022, when control of the Company was sold to Cohen Enterprises,
which is owned by Mr. Cohen. Epiq Scripts was formed in January 2022, and only began compounding drugs for patients in November 2022.
On February 15, 2023, the 51% of Epiq Scripts then owned by American International was transferred to Mr. Cohen as part of an exchange
transaction, whereby Mr. Cohen agreed to cancel his preferred stock of American International, which provided him voting control over
American International, in exchange for among other assets, American International’s ownership of Epiq Scripts. As a result, Epiq
Scripts is currently 51% owned by Mr. Cohen, our Chairman and Chief Executive Officer. Additionally, Mr. Cohen has served as the co-Manager
of Epiq Scripts since January 2022.
Pursuant
to the Master Services Agreement and a related statement of work (“SOW”), Epiq Scripts agreed to provide pharmacy and related
services to the Company, the Company agreed to exclusively use Epiq Scripts as the provider of the Services (defined below) during the
term of the agreement, so long as Epiq Scripts complies with the terms of the Master Services Agreement. The agreement also includes
a 30 day right of first refusal for Epiq Scripts to provide pharmacy services for any new product that Mango may introduce during the
term of the agreement.
Pursuant
to the SOW, Epiq Scripts agreed to provide for the online fulfillment, specialty compounding, packaging, shipping, dispensing and distribution
(collectively, the “Services”) of products sold exclusively via our website that may be prescribed as part of a telehealth
consultation on our platform. Epiq Scripts also agreed to provide mail service pharmacy services to us on an exclusive basis during the
term of the SOW.
We
agreed to provide Epiq Scripts with all custom packaging materials, including but not limited to, individual sachet and/or blister packaging
materials, outer box packaging, and any custom inserts and/or marketing information to accompany the prescription shipment, if any and
to provide Epiq Scripts with quarterly sales forecasts to ensure Epiq Scripts has enough packaging materials on hand to cover a 90 day
period. We agreed to pay for all direct shipping, delivery and related courier costs and to provide Epiq Scripts with direct access to
any online accounts to access and generate shipping labels for the fulfillment and delivery of our products.
The
SOW has a term through December 31, 2025, automatically renewable thereafter for successive one-year terms unless either party terminates
the agreement at least 90 days before renewal thereof and the SOW is subject to the same termination rights of the parties as set forth
in the Master Services Agreement (discussed below).
Pursuant
to the SOW, we agreed to pay Epiq Scripts certain fixed rate fees for prescription fulfillment, processing and packaging (per prescription)
and drug compounding (per pill), provided the per pill rate is reduced upon us exceeding 3,500 product packages per month.
Under
the Master Services Agreement, we are solely responsible for billing and collecting funds from our customers and Epiq Scripts is paid
out of funds that we actually collect.
We
paid Epiq Scripts a total of $60,000 upon our entry into the Master Services Agreement, comprising $45,000 as a one-time non-refundable
technology systems setup and implementation fee and $15,000 as an upfront retainer to be credited towards the future provision of pharmacy
and related services as outlined and detailed in the Master Services Agreement and SOW. All costs related to the pharmacy services provided
by Epiq Scripts are listed as related party costs of revenues on our statement of operations.
The
Master Services Agreement has a term of five years, automatically renewable to additional one-year terms thereafter unless either party
provides the other notice of termination at least 90 days prior to the date of automatic renewal. The Master Services Agreement can be
terminated (i) upon breach of the agreement by the other party, subject to a 90-day cure right, (ii) if a party enters into bankruptcy
or fails to pay its debts as they become due, or (iii) if Epiq Scripts becomes unable to perform the services covered by the Master Services
Agreement and any statements of work associated therewith.
Payments
under the Master Services Agreement are due within 15 days after the end of each month during which collections are received. The Master
Services Agreement contains customary confidentiality obligations, record retention provisions, audit rights, and representations and
warranties of the parties. Each party to the Master Services Agreement agreed to indemnify, defend, and hold harmless the other and the
other party’s officers, directors, shareholders, employees, and agents from and against any and all nonparty claims, or actions
for damages, liabilities (including strict liability), penalties, costs and expenses (including reasonable legal fees, expenses and costs)
to the proportionate extent caused by (1) the negligence or willful misconduct of the indemnitor or any of its employees or agents in
connection with the performance of the agreement, or (2) any breach of any representation, warranty or covenant under the agreement by
the indemnitor or any of its employees or agents. Additionally, the parties agreed that neither party will be liable to the other for
special, incidental, or exemplary damages, subject to certain limited exceptions. The Master Services Agreement does not address product
liability claims or assign any rights of indemnification or contribution in connection therewith.
We
paid Epiq Scripts a total of $60,000 upon our entry into the Master Services Agreement, comprising $45,000 as a one-time non-refundable
technology systems setup and implementation fee and $15,000 as an upfront retainer to be credited towards the future provision of pharmacy
and related services as outlined and detailed in the Master Services Agreement and SOW, of which $11,745 remained outstanding as of December
31, 2022 and $84,382 remained outstanding as of September 30, 2023. All costs related to the pharmacy services provided by Epiq Scripts
are listed as related party costs of revenues on our statement of operations.
Distribution
Agreement with ISFLST
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.
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 Market.
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.
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.
The
Distribution Agreement also includes a non-solicitation obligation of ISFLST, which applies during the term of the agreement and for
two years thereafter.
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.
Consulting
Agreement With Epiq Scripts
On
September 15, 2023, we entered into a Consulting Agreement (the “Consulting Agreement”) with Epiq Scripts. Pursuant to the
Consulting Agreement, Epiq Scripts agreed to provide pharmacy consulting services in connection with the Company’s global expansion
efforts, and as reasonably requested by the Company, during the term of the agreement, which is for five years, unless otherwise earlier
terminated (a) due to breach of the agreement by either party and the failure to cure such breach 30 days after written notice thereof;
(b) the mutual agreement of the parties; or (c) the date that Epiq Scripts provides the Company written notice of termination, which
may be at any time and for any reason.
In
consideration for agreeing to provide the services under the agreement, the Company agreed to pay Epiq Scripts (1) a one-time payment
of $65,000, payable within ten days of the entry into the agreement; and (2) a set fee, payable for each prescription drug pill sold
by the Company for cash, to the extent such pill must be prescribed by a medical doctor, or sold through retail pharmacies over the counter,
in jurisdictions where a doctor’s prescription is not required for the sale of such drugs, and sold in a Territory (defined below),
which consideration per pill decreases each year that the agreement is in effect, and is only payable for the first five years of the
agreement.
The
Consulting Agreement further provides that no payments are due for the sale of any prescription pills until the First Sale.
Under
the Consulting Agreement, (a) “Territory” means worldwide, except for the United States, including its territories and possessions
and the District of Columbia; and (b) “First Sale” means the date that the first commercial sale of prescription pills occurs
in the Territory.
Future
payments are also required to be offset equitably for any prescription pill sold which is later refunded, charged back, returned, or
reimbursed to a purchaser.
The
agreement includes customary representations of the parties, confidentiality and non-solicitation provisions, rights of Epiq Scripts
to audit the sales of prescription pills, subject to certain limitations and requirements, and the requirement that the Company reimburse
certain expenses of Epiq Scripts, subject to certain limitations and pre-approvals.
First
Amendment to MSA
On
September 15, 2023, we entered into a First Addendum to Master Services Agreement (“MSA”) with Epiq Scripts (the “First
Amendment”).
Pursuant
to the First Amendment, the parties agreed to amend the MSA to include certain Right of first negotiation rights and right of first refusal
rights (each as discussed below). Additionally, the First Amendment provides for certain rights to Epiq Scripts in the event that the
Company seeks to obtain pharmaceutical services in connection with certain Company products (collectively, “Pharmaceutical Services”)
in jurisdictions other than the United States, including, without limitation, Mexico and the United Kingdom, where Epiq Scripts does
not currently maintain licenses or permits (“Future Jurisdictions”, which shall also include, to the extent applicable, any
state in the United States in which Epiq Scripts does not then hold required permits or licenses for the provision of the Pharmaceutical
Services) and/or to terminate Epiq Scripts’ rights to provide exclusive Pharmaceutical Services in any current state of the United
States or Future Jurisdiction where Epiq Scripts may then be providing Pharmaceutical Services to the Company (each a “Current
Jurisdiction”).
Specifically,
the parties agreed in the First Amendment that should the Company decide to transfer any services provided by Epiq Scripts in a Current
Jurisdiction to another pharmaceutical service provider (“Transferred Services”), the Company will be required to pay Epiq
Scripts a fee of 1% of the total gross sales of all Prescription Products (defined below) by the Company resulting from the Transferred
Services in the Current Jurisdiction, for a period of the lesser of (a) five (5) years from the date the Company transferred the Transferred
Services; and (b) through the end of the term of the MSA (including where applicable, any renewal term)(the “Non-Use Fee”).
The Non-Use Fee is payable monthly in arrears, for calendar quarters, by the 15th day following the end of each calendar quarter. “Prescription
Products” means Products (as defined in the MSA) sold by the Company which must be prescribed by a medical doctor.
Notwithstanding
the above, the Non-Use Fee shall not apply, and the Company shall not be obligated to pay any Non-Use Fee (a) in the event that the Transferred
Services are provided directly by the Company or a majority-owned subsidiary of the Company; (b) in the event the Company decides to
enter into an agreement with another pharmaceutical service provider to provide Pharmaceutical Services in a Future Jurisdiction; or
(c) in connection with any services provided by any parties in any Future Jurisdictions.
The
First Amendment also provides that until the fifth anniversary of the First Amendment, the Company shall notify Epiq Scripts in writing
of any plans to (a) expand its need for pharmacy services outside of those contemplated by the MSA; (b) expand its need for pharmacy
services into a new jurisdiction which Epiq Scripts does not then operate in (including, but not limited to new countries); or (c) begin
providing pharmacy services internally (either through organic growth or acquisition). Thereafter Epiq Scripts has the right to provide
the Company written notice of its intention to provide such services (as described in (a) or (b) above, whereafter the Company is required
to discuss and negotiate such services in good faith with Epiq Scripts for a period of not less than 15 days). Otherwise, in the event
of the occurrence of an event discussed in (c) above, the Company is required to discuss the possibility of Epiq Scripts either co-operating
the pharmacy or providing management services to the Company in good faith for 15 days. In the event after such 15 day period, the Company
and Epiq Scripts cannot come to a mutually agreeable agreement, the Company is under no further obligation regarding the matter set forth
in the notice provided to Epiq Scripts.
Finally,
the First Amendment includes a requirement whereby if Epiq Scripts receives notice of any proposed fundamental transaction involving
Epiq Scripts or its assets, including any agreement, arrangement, offer or proposal (including a letter of intent, term sheet, form of
definitive agreement or definitive agreement) for an asset sale or acquisition, merger, acquisition or sale of securities, or redemption
or repurchase of securities, Epiq Scripts must provide the Company notice of such offer within three days, after which receipt the Company
will have the right of first refusal for 30 days to become the purchaser in connection with the notified transaction, on the terms, and
subject to the conditions, set forth in such notified offer and pursuant to the conditions of the First Amendment.
On
January 30, 2025, the Company, with the approval of the disinterested members of the Board of Directors and the Company’s Audit
Committee, made up of independent members of the Board of Directors, entered into two Assignment, Assumption and Novation Agreements
(the “Epiq Scripts Assignments”) with Epiq Scripts. Pursuant to the Epiq Scripts Assignments, the Company assigned
all of its rights under (1) the MSA, as amended; and (2) the Consulting Agreement, to the Company’s current wholly-owned subsidiary,
Mango & Peaches Corp. (“Mango & Peaches”). Mango & Peaches agreed to take responsibility for all obligations
thereunder, effective as of the assignment date, and Epiq Scripts agreed to novate the responsibility of the Company thereunder, effective
as of the assignment date. Additionally, we agreed to indemnify Mango & Peaches for any liability under such agreements prior to
the assignment date and Mango & Peaches agreed to indemnify us against any liability under such agreements after the assignment date.
Consulting
Agreements
On
September 6, 2022, we entered into a Consulting Agreement with PHX Global, LLC (“PHX”), which is owned by Peter “Casey”
Jensen, who was a member of the Board of Directors of American International. Pursuant to the Consulting Agreement, PHX agreed to provide
consulting and general business advisory services as reasonably requested by the Company during the term of the agreement, which was
for 12 months, unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach
30 days after written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued PHX
3,333 shares of restricted common stock.
On
November 7, 2023, we renewed the Consulting Agreement with PHX. Pursuant to the Consulting Agreement, PHX agreed to provide consulting
and general business advisory services as reasonably requested by the Company during the term of the agreement, which was for 12 months,
unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach 30 days after
written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued PHX 13,333 shares
of restricted common stock. The agreement contains customary confidentiality and non-solicitation provisions. The shares were valued
at $7.05 per share for a total of $94,000.
On
April 25, 2024, the Company amended its Consulting Agreement with PHX dated November 7, 2023 whereby the Company agreed to issue PHX
an additional 13,333 shares of restricted common stock. The additional 13,333 shares were issued under, and subject to the terms of,
the Company’s 2022 Equity Incentive Plan. The shares were valued at $4.20 per share for a total of $56,000.
On
September 27, 2024, we extended a Consulting Agreement with PHX. Pursuant to the Consulting Agreement, PHX agreed to provide consulting
and general business advisory services as reasonably requested by the Company during the term of the agreement, which was for six months,
unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach 30 days after
written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued PHX 13,333 shares
of restricted common stock. The agreement contains customary confidentiality and non-solicitation provisions. The shares were valued
at $3.60 per share for a total of $48,000.
Greentree
Service Agreements
On
September 1, 2023, we entered into a service agreement with Greentree Financial Group, Inc. (“Greentree”). Pursuant
to the Service Agreement, Greentree agreed to perform the following services: (a) bookkeeping services for the Company for the period
from October 1, 2023 through September 30, 2024; (b) advice and assistance to the Company in connection with the conversion of its financial
reporting systems, including its projected financial statements, to a format that is consistent with US GAAP; (c) assistance to the Company
with compliance filings for the quarters ended September 30, 2023, March 31, 2024, June 30, 2024 and the year ended December 31, 2023,
including the structure and entries as well as assistance with US GAAP footnotes; (d) reviewing, and providing advice to the Company
on, all documents and accounting systems relating to its finances and transactions, with the purpose of bringing such documents and systems
into compliance with US GAAP or disclosures required by the SEC; and (e) providing necessary consulting services and support as a liaison
for the Company to third party service providers, including coordination amongst the Company and its attorneys, CPAs and transfer agent.
Since February 2015, Mr. Eugene (Gene) M. Johnston, our Chief Financial Officer (who was appointed October 1, 2022) has served as an
Audit Manager for Greentree.
The
Company agreed to issue Greentree 5,000 shares of the Company’s restricted common stock upon the parties’ entry into the
agreement, and to pay Greentree $40,000 in cash, payable as follows: (a) $20,000 on or before September 30, 2023; (b) $20,000 on or before
March 31, 2024. We also agreed to reimburse Greentree for its reasonable out-of-pocket expenses incurred in connection with Greentree’s
activities under the agreement, including the reasonable fees and travel expenses for the meetings on behalf of the Company. The Service
Agreement includes customary indemnification obligations requiring the Company to indemnify Greentree and its affiliates with regard
to certain matters. The shares were valued at $16.95 per share for a total of $84,750.
On
December 2, 2024, the Company entered into another service agreement with Greentree. The Company and Greentree were previously party
to a service agreement which expired pursuant to its terms on September 30, 2024. Since February 2015, Mr. Eugene M. Johnston, our Chief
Financial Officer (who was appointed October 1, 2022), has served as Audit Manager for Greentree.
Pursuant
to the Service Agreement, Greentree agreed to perform the following services: (a) assistance to the Company with compliance filings for
the quarters ended March 31, 2025, June 30, 2025, September 30, 2025, and the year ended December 31, 2024, including the consolidation
structure and entries as well as assistance with United States Generally Accepted Accounting Principles (“US GAAP”)
footnotes; (b) reviewing, and providing advice to the Company on, all documents and accounting systems relating to its finances and transactions,
with the purpose of bringing such documents and systems into compliance with US GAAP or disclosures required by the Securities and Exchange
Commission (the “SEC”); (c) providing necessary consulting services and support as a liaison for the Company to third
party service providers, including coordination amongst the Company and its attorneys, certified public accountants and transfer agent;
and (d) preparing and filing the Company’s tax returns with the Internal Revenue Service for the 2024 tax year.
The
Company agreed to issue Greentree 40,000 shares of the Company’s restricted common stock upon the parties’ entry into the
agreement (fully-earned upon issuance), and to pay Greentree $40,000 in cash, payable as follows: (a) $20,000 on or before December 31,
2024; and (b) $20,000 on or before March 31, 2025. We also agreed to reimburse Greentree for its reasonable out-of-pocket expenses incurred
in connection with Greentree’s activities under the agreement, including the reasonable fees and travel expenses for the meetings
on behalf of the Company.
The
Service Agreement continues in effect through October 15, 2025, but may be terminated earlier with 45 days’ notice from the Company
to Greentree, provided that in the event the Company terminates the agreement prior to the end of the Term, the entire cash fee due during
the term of the Service Agreement is immediately due and payable.
The
Service Agreement includes customary indemnification obligations requiring the Company to indemnify Greentree and its affiliates with
regard to certain matters.
On
September 6, 2022, we entered into a Consulting Agreement with Ezekiel Elliott (“Elliott”), currently a professional football
player in the National Football League (NFL), to provide consulting and general business advisory services as reasonably requested by
the Company during the term of the agreement, which was for 12 months unless otherwise earlier terminated due to breach of the agreement
by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for agreeing to provide the
services under the agreement, the Company issued Elliott 100,000 shares of restricted common stock. The agreement contains customary
confidentiality and non-solicitation provisions. We also agreed to include the shares issued to Elliott in the Resale Prospectus, which
shares of common stock were included therein.
On
September 15, 2022, we entered into a Consulting Agreement with David Sandler, an individual (“Sandler”), to provide consulting
and general business advisory services as reasonably requested by the Company during the term of the agreement, which was for six months,
unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach 30 days after
written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued Sandler 10,000
shares of restricted common stock. The agreement contains customary confidentiality and non-solicitation provisions. We also agreed to
include the shares issued to Sandler in the Resale Prospectus, which shares of common stock were included therein.
On
September 15, 2022, we entered into a Consulting Agreement with Hsiaoching Chou, an individual (“Chou”), to provide consulting
and general business advisory services as reasonably requested by the Company during the term of the agreement, which was for six months,
unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach 30 days after
written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued Chou 5,000 shares
of restricted common stock. The agreement contains customary confidentiality and non-solicitation provisions. We also agreed to include
the shares issued to Chou in the Resale Prospectus, which shares of common stock were included therein.
On
September 22, 2022, we entered into a service agreement with Greentree Financial Group, Inc. (“Greentree” and the “Service
Agreement”). Pursuant to the Service Agreement, Greentree agreed to perform the following services: (a) bookkeeping services for
the Company for the period from October 1, 2022 through June 30, 2023; (b) advice and assistance to the Company in connection with the
conversion of its financial reporting systems, including its projected financial statements, to a format that is consistent with United
States Generally Accepted Accounting Principles (“US GAAP”); (c) assistance to the Company with compliance filings for the
quarters ended September 30, 2022, March 31, 2023, June 30, 2023 and the year ended December 31, 2022, including the consolidation structure
and entries as well as assistance with US GAAP footnotes; (d) reviewing, and providing advice to the Company on, all documents and accounting
systems relating to its finances and transactions, with the purpose of bringing such documents and systems into compliance with US GAAP
or disclosures required by the SEC; and (e) providing necessary consulting services and support as a liaison for the Company to third
party service providers, including coordination amongst the Company and its attorneys, CPAs and transfer agent. Since February 2015,
Eugene M. Johnston, our Chief Financial Officer (who was appointed October 1, 2022), has served as Audit Manager for Greentree.
The
Company agreed to issue Greentree 100,000 shares of the Company’s restricted common stock upon the parties’ entry into the
agreement, and to pay Greentree $50,000 in cash, payable as follows: (a) $12,500 on or before September 30, 2022, which has been paid;
(b) $12,500 on or before December 31, 2022, which has been paid; (c) $12,500 or before March 31, 2023; and (d) $12,500 on or before June
30, 2023. We also agreed to include the 100,000 shares of common stock issued to Greentree in the Resale Prospectus, which shares of
common stock are included therein, and to reimburse Greentree for its reasonable out-of-pocket expenses incurred in connection with Greentree’s
activities under the agreement, including the reasonable fees and travel expenses for the meetings on behalf of the Company.
The
Service Agreement continued in effect through August 14, 2023.
The
Service Agreement includes customary indemnification obligations requiring the Company to indemnify Greentree and its affiliates with
regard to certain matters.
On
November 1, 2022, we entered into a Consulting Agreement with White Unicorn, LLC (“White Unicorn”), to provide business advisory
services related to product packaging, strategic marketing, branding, advertising and future product development as reasonably requested
by the Company during the term of the agreement, which was for 12 months unless otherwise earlier terminated due to breach of the agreement
by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for agreeing to provide the
services under the agreement, the Company issued White Unicorn 100,000 shares of restricted common stock. The agreement contains customary
confidentiality and non-solicitation provisions.
On
December 21, 2022, we entered into a Consulting Agreement with Chartered Services, LLC (“Chartered Services”), to provide
strategic marketing services for advertising and consulting, product distribution, digital marketing and identifying creative and constructive
brand awareness to the Company during the term of the agreement, which was for six months unless otherwise earlier terminated due to
breach of the agreement by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for
agreeing to provide the services under the agreement, the Company agreed to pay Chartered Services $150,000 in cash (with $75,000 payable
upon entry into the agreement and $75,000 payable on January 31, 2023, which amount has been paid to date) and issued Chartered Services
250,000 shares of restricted common stock. The agreement contains customary confidentiality and non-solicitation provisions.
On
January 3, 2023, we entered into a Consulting Agreement with DojoLabs Group, Inc. (“DojoLabs”), to provide various strategic
marketing related services to the Company pursuant to a defined scope of work during the term of the agreement, which is the earlier
of a) all deliverables being received by the Company pursuant to the scope of work, or b) if terminated due to breach of the agreement
by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for agreeing to provide the
services under the agreement, the Company agreed to pay DojoLabs $100,000 in cash and issued DojoLabs 50,000 shares of restricted common
stock with registration rights (the registration of the resale of which shares were included in the Resale Prospectus) and fully vest
upon the completion of all work performed under the scope of work. The agreement contains customary confidentiality and non-solicitation
provisions.
On
January 6, 2023, we entered into a Consulting Agreement with Bethor, Ltd. (“Bethor”), to provide strategic advisory services
to the Company during the term of the agreement, which was for 12 months unless otherwise earlier terminated due to breach of the agreement
by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for agreeing to provide the
services under the agreement, the Company issued Bethor 250,000 shares of restricted common stock with registration rights (the registration
of the resale of which shares were included in the Resale Prospectus). The agreement contains customary confidentiality and non-solicitation
provisions.
On
January 6, 2023, the Company established an advisory board (the “Advisory Board”) and approved and adopted a charter (the
“Advisory Board Charter”) to govern the Advisory Board. Pursuant to the Advisory Board Charter, the Advisory Board shall
be comprised of a minimum of two (2) members, all of whom shall be appointed and subject to removal by the Board of Directors at any
time. In addition to the enumerated responsibilities of the Advisory Board in the Advisory Board Charter, the primary function of the
Advisory Board is to assist the Board of Directors in its general oversight of the Company’s development of new business ventures
and strategic planning.
In
connection with the establishment of the Advisory Board, the Board of Directors appointed Dr. Brian Rudman (“Dr. Rudman”)
and Mr. Jarrett Boon (“Mr. Boon”), both of whom are independent, non-Board members and non-Company employees, to the Advisory
Board. Dr. Rudman serves as Chairman of the Advisory Board.
In
connection with Dr. Rudman’s appointment to the Advisory Board, the Company entered into an Advisor Agreement (the “Dr. Rudman
Consulting Agreement”), dated effective January 6, 2023, with Dr. Rudman, whereby the Company agreed to issue Dr. Rudman 25,000
shares of the Company’s restricted common stock, pay Dr. Rudman $2,000 per month in cash, and reimburse Dr. Rudman for reasonable
out-of-pocket expenses, including, without limitation, travel expenses incurred by him in connection with the Company’s requests
of the performance of his duties to the Company in service on the Advisory Board.
In
connection with Mr. Boon’s appointment to the Advisory Board, the Company entered into an Advisor Agreement (the “Mr. Boon
Consulting Agreement”), dated effective January 6, 2023, with Mr. Boon, whereby the Company agreed to issue Mr. Boon 25,000 shares
of the Company’s restricted common stock and to reimburse Mr. Boon for reasonable out-of-pocket expenses, including, without limitation,
travel expenses incurred by him in connection with the Company’s requests of the performance of his duties to the Company in service
on the Advisory Board.
On
January 24, 2023, we entered into Consulting Agreements with four consultants to the Company: (1) Sultan Haroon; (2) John Helfrich; (3)
Justin Baker; and (4) Maja Matthews, each of whom is also an employee of Epiq Scripts. Pursuant to the Consulting Agreements, the Consultants
agreed to provide us services related to the research, development, packaging and marketing for additional pharmaceutical and other over-the-counter
related products during the term of the agreement, which each had a term of 18 months unless otherwise earlier terminated due to breach
of the agreement by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for agreeing
to provide the services under the agreement, the Company issued an aggregate of 350,000 shares of common stock to the consultants as
follows: (1) Sultan Haroon 150,000 shares of restricted common stock; (2) John Helfrich 25,000 shares of restricted common stock; (3)
Justin Baker 25,000 shares of restricted common stock; and (4) Maja Matthews 150,000 shares of restricted common stock. The shares issued
to Haroon and Matthews vest at the rate of 50,000 shares upon entry into the agreement, 50,000 shares upon the Company’s successful
launch of a new product category, and 50,000 shares upon the Company’s successful launch of a second and additional new product
category, in each case prior to the 18-month anniversary of the applicable agreement. The shares issued to Helfrich and Baker vest at
the rate of 10,000 shares upon entry into the agreement, 7,500 shares upon the Company’s successful launch of a new product category,
and 7,500 shares upon the Company’s successful launch of a second and additional new product category, in each case prior to the
18-month anniversary of the applicable agreement. Any shares not vested by the eighteen-month anniversary of the applicable agreement
are forfeited. The agreement contains customary confidentiality and non-solicitation provisions.
On
May 1, 2023, we entered into a Software Development Agreement with Redlime Solutions, Inc. (“Redlime”) to provide software
development services during the term of the agreement, which is for 12 months. In consideration for agreeing to provide the services
under the agreement, the Company agreed to pay Redlime $300,000 in cash and issue Redlime 180,000 shares of restricted common stock.
The shares were valued at $1.00 per share for a total of $180,000.
On
May 25, 2023, the Board of Directors appointed Mr. Aaron Andrew, an independent, non-Board member and non-Company employee, to the Advisory
Board. In connection with Mr. Andrew’s appointment to the Advisory Board, the Company entered into an Advisor Agreement (the “Andrew
Consulting Agreement”), dated effective May 25, 2023, with Mr. Andrew, whereby the Company agreed to issue Mr. Andrew 50,000 shares
of the Company’s restricted common stock under the 2022 Plan and to reimburse Mr. Andrew for reasonable out-of-pocket expenses,
including, without limitation, travel expenses incurred by him in connection with the Company’s requests of the performance of
his duties to the Company in service on the Advisory Board. The shares were valued at $1.10 per share for a total of $55,000.
On
June 1, 2023, we entered into a Consulting Agreement with Major Dodge (“Major”), to provide acting and production related
services to the Company during the term of the agreement, which is for 12 months unless otherwise earlier terminated due to breach of
the agreement by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for agreeing
to provide the services under the agreement, the Company issued Major 20,000 shares of restricted common stock under the 2022 Plan. The
agreement contains customary confidentiality and non-solicitation provisions. The shares were valued at $1.10 per share for a total of
$22,000.
On
June 1, 2023, we entered into a Production and Broadcasting Agreement with New To The Street Group, LLC (“New To The Street”),
to provide production, broadcasting and other marketing related services to the Company during the term of the agreement, which was for
3 months unless otherwise earlier terminated. In consideration for agreeing to provide the services under the agreement, the Company
issued New To The Street 50,000 shares of restricted common stock and agreed to pay New To The Street a monthly cash payment of $5,000.
The shares were valued at $1.10 per share for a total of $55,000.
On
September 1, 2023, we entered into a service agreement with Greentree. Pursuant to the Service Agreement, Greentree agreed to perform
the following services: (a) bookkeeping services for the Company for the period from October 1, 2023 through September 30, 2024; (b)
advice and assistance to the Company in connection with the conversion of its financial reporting systems, including its projected financial
statements, to a format that is consistent with US GAAP; (c) assistance to the Company with compliance filings for the quarters ended
September 30, 2023, March 31, 2024, June 30, 2024 and the year ended December 31, 2023, including the structure and entries as well as
assistance with US GAAP footnotes; (d) reviewing, and providing advice to the Company on, all documents and accounting systems relating
to its finances and transactions, with the purpose of bringing such documents and systems into compliance with US GAAP or disclosures
required by the SEC; and (e) providing necessary consulting services and support as a liaison for the Company to third party service
providers, including coordination amongst the Company and its attorneys, CPAs and transfer agent. Since February 2015, Eugene (Gene)
M. Johnston, our Chief Financial Officer (who was appointed October 1, 2022) has served as an Audit Manager for Greentree.
The
Company agreed to issue Greentree 75,000 shares of the Company’s restricted common stock upon the parties’ entry into the
agreement, and to pay Greentree $40,000 in cash, payable as follows: (a) $20,000 on or before September 30, 2023; (b) $20,000 on or before
March 31, 2024. We also agreed to reimburse Greentree for its reasonable out-of-pocket expenses incurred in connection with Greentree’s
activities under the agreement, including the reasonable fees and travel expenses for the meetings on behalf of the Company. The Service
Agreement includes customary indemnification obligations requiring the Company to indemnify Greentree and its affiliates with regard
to certain matters. The shares were valued at $1.13 per share for a total of $84,750.
On
November 1, 2023, the Board of Directors appointed Dr. Douglas Christianson (“Dr. Christianson”) an independent, non-Board
member and non-Company employee, to the Advisory Board. In connection with Dr. Christianson’s appointment to the Advisory Board,
the Company entered into an Advisor Agreement (the “Christianson Consulting Agreement”), dated effective November 1, 2023,
with Dr. Christianson, whereby the Company agreed to issue Dr. Christianson 50,000 shares of the Company’s common stock under the
2022 Plan, which vest six months from the issuance date, and to reimburse Dr. Christianson for reasonable out-of-pocket expenses, including,
without limitation, travel expenses incurred by him in connection with the Company’s requests of the performance of his duties
to the Company in his service on the Advisory Board. The agreement has a one year term, but can be terminated with written notice from
either party with 30 days’ notice. The agreement includes customary confidentiality obligations relating to Dr. Christianson and
indemnification obligations of the parties, requiring each party to indemnify and hold harmless the other against breaches of the agreement
and intentionally misconduct or gross negligence (Dr. Christianson) and the operations of the Company (the Company). The shares were
valued at $0.65 per share for a total of $32,500.
On
November 1, 2023, we entered into an Influencer Contract with Jason Szkup (“Scoop”), to provide influencer and marketing
related services to the Company during the term of the agreement, including posting social media videos. The agreement has a term of
three months, unless otherwise earlier terminated. In consideration for agreeing to provide the services under the agreement, the Company
agreed to pay Scoop $10,000 and to issue Scoop 30,000 shares of common stock under the 2022 Plan. The agreement contains customary confidentiality
and non-disclosure provisions. The shares were valued at $0.65 per share for a total of $19,500.
On
November 7, 2023, we entered into a subsequent Consulting Agreement with PHX to provide consulting and general business advisory services
as reasonably requested by the Company during the term of the agreement, which was for 12 months, unless otherwise earlier terminated
due to breach of the agreement by either party, and the failure to cure such breach 30 days after written notice thereof. In consideration
for agreeing to provide the services under the agreement, the Company paid PHX $25,000 in cash and issued PHX 200,000 shares of common
stock under the 2022 Plan. The agreement contains customary confidentiality and non-solicitation provisions.
Master
Services Agreement with Global Career Networks
On
December 1, 2022, the Company entered into a Master Services Agreement with Global Career Networks, Inc. (“GCN”). Pursuant
to the agreement, we issued GCN 100,000 shares of restricted common stock with registration rights (which shares were included in the
Resale Prospectus) and GCN agreed to assist us with a planned twitter marketing campaign. The agreement has a one year term (provided
the individual project described therein had a six month term, beginning December 1, 2022), and may be renewed thereafter for additional
one year terms with the mutual approval of the parties. Either party may terminate the agreement at any time for any reason, with at
least 60 days’ notice, or upon the occurrence of any breach or default under the agreement, which remains uncured within 30 days
of written notice thereof, or if the non-terminating party is subject to bankruptcy. The agreement contains customary confidentiality,
indemnification obligations, and limitations of liability.
Intellectual
Property Purchase Agreement
Effective
on April 24, 2025, the Company entered into an Intellectual Property Purchase Agreement (the “IP Purchase Agreement”),
with Smokeless Technology Corp. (“Smokeless”). Pursuant to the IP Purchase Agreement, we purchased certain intellectual
property, contracts, and know-how owned by Smokeless related to certain intellectual property and related assets including, without limitation,
all patents, trademarks, product formulations, know-how, agreements, contracts, contractor agreements, supply chain contracts, manufacturing
contacts and agreements for the entrance into a new business involving and surrounding oral pouches as a delivery mechanism for nutritional
and wellness products (collectively, the “Purchased IP”), in consideration for 1,600,000 shares of the Company’s
restricted common stock (the “IP Purchase Shares”) and the Royalty Payments (defined and discussed below).
Pursuant
to the IP Purchase Agreement, we agreed to pay Smokeless a royalty of ten percent (10%) of gross worldwide sales of any product we sell
associated with the Purchased IP, which meets the following requirements: (a) the design of the product was not transferred or provided
for purposes of providing a license to cover an offering of a third party and controlled by us, and (b) the product is sold by us, or
in development with the intention to commercialize (collectively, “Mango Purchased IP Products”), which will go into
effect on April 23, 2026 and are required to be paid in perpetuity to the extent the Mango Purchased IP Products are being sold (the
“Royalty Payments”). The Royalty Payments are required to be paid on an annual basis, within 30 days after the end
of the calendar year.
The
IP Purchase Agreement included standard representations and warranties and confidentiality and indemnification obligations of the parties,
for a transaction of that type and size.
The
IP Purchase Agreement, and the purchase of the Purchased IP, closed on April 24, 2025, upon the parties entry into the IP Purchase Agreement,
and the IP Purchase Shares were issued on April 25, 2025.
Consulting
Agreement
On
April 24, 2025, we entered into a Consulting Agreement with Strategem Solutions Inc. (“Strategem” and the “Consulting
Agreement”), pursuant to which Strategem agreed to provide us the services of Tim Corkum (“Corkum”), in
the capacity of President of a to be formed wholly-owned subsidiary of the Company, and to provide us consulting services related to
the development of a pouch division, product innovation, business development, and commercialization strategy for a smokeless product
vertical. Corkum is a Director of Smokeless. The Consulting Agreement has a term of 12 months unless otherwise earlier terminated due
to breach of the agreement by either party, subject to a thirty-day cure right. In consideration for agreeing to provide the services
under the agreement, the Company agreed to issue an aggregate of 120,000 shares of the Company’s common stock to Strategem (the
“Sign-On Shares”). The Sign-On Shares will be issued under the Mangoceuticals, Inc. 2022 Equity Incentive Plan and
vest at a rate of 10,000 shares per month with the first month vesting upon execution of the Consulting Agreement. Any shares not vested
on the date the term ends will be forfeited. We also agreed to pay Strategem $12,500 per month in cash during the term of the Consulting
Agreement, which shall accrue on a monthly basis until the Company has completed a successful raise of an aggregate of at least $1.5
million from the sale of either debt or equity of the Company after the date of the agreement. The Consulting Agreement includes customary
confidentiality and non-solicitation obligations, mutual representations and warranties, and confirmations that Strategem/Corkum is serving
as an independent contractor to the Company.
Intellectual
Property
We
believe that our ability to obtain and maintain intellectual property protection for our technology platform, preserve the confidentiality
of our trade secrets, and operate without violating the intellectual property rights of others will be important to our success. We rely
on a combination of trademark, copyright, trade secret, including federal, state and common law rights in the United States and other
countries, nondisclosure agreements, and other measures to protect our intellectual property, and may seek patent protection of our intellectual
property in the future. Despite any measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects
of our products or to obtain and use information that we regard as proprietary. Our business is affected by our ability to protect against
misappropriation and infringement of our intellectual property and other proprietary rights.
Our
intellectual property includes the content of our websites, our registered domain names, our unregistered trademarks, and certain trade
secrets.
We
have been granted with the United States Patent and Trademark Office for a federal trademark for the following word mark on October 13,
2024 with Reg. No. 7,184,368:
Additionally,
the Company has been granted with the United States Patent and Trademark Office for the following federal trademarks:
-
If You Take It They Will Come April 11, 2023 Reg. No. 7,025,954
-
It Takes Two To Mango May 16, 2023 Reg. No. 7,055,400
-
Orange Is The New Blue December 19, 2023 Reg. No. 7,246,645
-
Big Mango Energy November 28, 2023 Reg. No. 7,232,305
The
Company has also applied with the United States Patent and Trademark Office for the following federal trademarks:
-
TreatMint
-
Make Every Day Hump Day
Employees
The
Company is currently operated and managed by the Founder, Chairman and Chief Executive Officer, Jacob D. Cohen, Amanda Hammer, the Chief
Operating Officer of the Company, and Eugene Johnston, the Chief Financial Officer of the Company. The Company utilizes the assistance
of various independent contractors for administrative and technology development related services. We anticipate establishing a compensation
program designed to align the compensation of our employees with performance and to provide the proper incentives to attract, retain
and motivate employees to achieve superior results in the future. The structure of our anticipated compensation program will balance
incentives earnings for both short-term and long-term performance such as incentive bonuses and flexible schedules. The Company also
intends to develop a culture of inclusion and diversity and places a high value on diversity and inclusion. Our future success will depend
partially on our ability to attract, retain and motivate qualified personnel. We are not a party to any collective bargaining agreements
and have not experienced any strikes or work stoppages. We consider our relations with our employees to be satisfactory. Mr. Cohen and
Mrs. Hammer, are currently party to employment agreements with the Company as discussed below under “Executive and Director Compensation-Employment
Agreements.”
Properties
On
September 28, 2022, and with an effective date of October 1, 2022, the Company entered into a Lease Agreement with Rox Trep Tollway,
L.P. (the “Landlord”) to lease and occupy approximately 2,201 square feet of office space located at 15110 N. Dallas Parkway,
Suite 600, Dallas, Texas 75248 to serve as the Company’s main headquarters (the “Lease Agreement”). The Lease Agreement
has a term of 38 months (through December 31, 2025) and has a monthly base rent of $0 for the second month; $5,778, or $31.50 per square
foot, for months 1 and 3-18 and increases at the rate of $1 per square foot per annum thereafter until the end of the lease term (the
“Base Rent”). In addition to the Base Rent, the Company is required to reimburse the landlord for its pro-rata share of all
real estate taxes and assessments, hazard and liability insurance and common area maintenance costs for the building at the rate of 2.45%
(the “Proportionate Rent”). Upon the execution of the Lease Agreement, the Company agreed to prepay the first full month’s
Base Rent along with a security deposit equal to $16,942. The lease includes an option to extend the lease for an additional period of
36 calendar months at market.
We
believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed. We do not
own any real property.
Legal
Proceedings
On
October 31, 2024, Eli Lilly and Company filed a complaint against us in the Northern District of Texas Dallas Division. The complaint
alleges causes of action against us for false and misleading advertising and promotion in violation of Section 43(a)(1)(B) of the Lanham
Act; and false advertising, in connection with the Company’s TRIM product, and seeks (a) a declaratory judgment, an injunction
from falsely stating or suggesting that our oral dissolvable tirzepatide tablets are approved by FDA, have been the subject of clinical
studies, or achieve certain therapeutic outcomes; engaging in any unfair competition with Eli Lilly; and engaging in any deceptive or
unfair acts; (b) an order requiring the Company and its officers, agents, servants, employees, and attorneys and all persons acting in
concert or participation with any of them, to engage in corrective advertising by informing consumers that: a. our oral dissolvable tirzepatide
tablets do not contain the same formulation as MOUNJARO® or ZEPBOUND®; our oral dissolvable tirzepatide tablets do not contain
the same dosage as MOUNJARO® or ZEPBOUND®; our oral dissolvable tirzepatide tablets are not and have never been approved by FDA;
our oral dissolvable tirzepatide tablets have never been studied in clinical trials; and our oral dissolvable tirzepatide tablets have
never been demonstrated to be safe or effective; (c) an order directing the Company to file with the court and serve on Eli Lilly’s
attorneys, thirty (30) days after the date of entry of any injunction, a report in writing and under oath setting forth in detail the
manner and form in which it has complied with the court’s injunction; (e) an order requiring the Company to account for and pay
to Eli Lilly any and all profits arising from the foregoing acts of alleged false advertising; (f) an order requiring the Company to
pay Eli Lilly compensatory damages in an amount as of yet undetermined caused by the false advertising and trebling such compensatory
damages for payment to Lilly in accordance with 15 U.S.C. § 1117 and other applicable laws; (f) an order requiring the Company to
pay Eli Lilly all types of monetary remedies available under Texas state law in amounts as of yet undetermined caused by the foregoing
acts of unfair competition; (g) pre-judgment and post-judgment interest on all damages; and (h) attorney’s fees.
The
initial Complaint asserted two claims: (i) false advertising under the federal Lanham Act; and (ii) common law deceptive advertising.
The Company moved to dismiss the second claim, arguing that Texas does not recognize such a claim. Thereafter on January 30, 2025, Eli
Lilly responded by filing an amended complaint wherein it removed the 2nd cause of action. On February 24, 2025, the Company
filed its response along with its affirmative defenses and concluding with a motion to dismiss.
When
the Action was filed, management responded by making changes to its website; specifically, removing the allegedly offending references
to FDA studies. The product is no longer identified on the MangoRx website, the product cannot be purchased and no sales have been made.
The Company, by and through counsel, has been attempting to resolve the matter, but intends to vigorously defend the matter if an early
resolution is not reached.
The
impact and outcome of litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from
time to time that may harm our business. The above claims and others, even if lacking merit, could result in the expenditure by us of
significant financial and managerial resources. We may become involved in additional material legal proceedings in the future.
DETERMINATION
OF OFFERING PRICE
The
selling stockholders will offer shares of our common stock at the prevailing market prices or privately negotiated prices. The offering
price of our common stock does not necessarily bear any relationship to our book value, assets, past operating results, financial condition,
or any other established criteria of value. Our common stock may not trade at the market prices in excess of the offering prices for
common stock in any public market, will be determined in the marketplace, and may be influenced by many factors, including the depth
and liquidity of the market for our common stock.
MARKET
PRICE OF COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Market
Information
Our
common stock commenced trading on the Nasdaq under the symbol “MGRX” on March 21, 2023.
Holders
As
of May 27, 2025, 9,884,477 shares of our common stock were outstanding among 37 holders of record.
Dividend
Policy
We
currently intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business
and we do not anticipate paying any cash dividends in the foreseeable future. Except for a one-time special dividend in connection with
our distribution of the Shi Loan (as defined herein), we have not paid any cash dividends. See “Certain Relationships and Related
Party Transactions.” Any future determination related to our dividend policy will be made at the discretion of our board of directors
after considering our financial condition, results of operations, capital requirements, business prospects, and other factors our board
of directors deems relevant, and subject to the restrictions contained in any future financing instruments. In addition, our ability
to pay cash dividends is currently restricted by the terms of our credit facilities. Our ability to pay cash dividends on our capital
stock in the future may also be limited by the terms of any preferred securities we may issue or agreements governing any additional
indebtedness we may incur.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial ownership of our common stock as of May 27, 2025 (the
“Date of Determination”) by (i) each Named Executive Officer, as such term is defined under “Executive Compensation,”
(ii) each member of our Board of Directors, (iii) each person deemed to be the beneficial owner of more than five percent (5%) of our
common stock, and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, each person named in the following
table is assumed to have sole voting power and investment power with respect to all shares of our common stock listed as owned by such
person.
The
column titled “Beneficial Ownership” is based on a total of 9,884,477 shares of our common stock outstanding as of
the Date of Determination.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting and/or investing power with respect to securities.
These rules generally provide that shares of common stock subject to options, warrants or other convertible securities that are currently
exercisable or convertible, or exercisable or convertible within 60 days of the Date of Determination, are deemed to be outstanding and
to be beneficially owned by the person or group holding such options, warrants or other convertible securities for the purpose of computing
the percentage ownership of such person or group, but are not treated as outstanding for the purpose of computing the percentage ownership
of any other person or group.
To
our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, as of the Date
of Determination, (a) the persons named in the table have sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them, subject to applicable community property laws; and (b) no person owns more than 5% of our common
stock. Unless otherwise indicated, the address for each of the officers or directors listed in the table below is 15110 N. Dallas Parkway,
Suite 600, Dallas, Texas 75248.
| Title
of Class | |
Name
of Beneficial Owner | |
Number
of Common
Stock
Shares
Beneficially
Owned | | |
Percent
Beneficial
Ownership | |
| Directors, Named Executive Officers and Executive Officers | |
| | | |
| | |
| Common
Stock | |
Jacob
D. Cohen | |
| 921,667 | (1) | |
| 9.32 | % |
| Common
Stock | |
Isaac
Antonios | |
| 60,000 | | |
| - | |
| Common
Stock | |
Eugene
M. Johnston | |
| 38,334 | | |
| * | |
| Common
Stock | |
Amanda
Hammer | |
| 15,001 | (2) | |
| * | |
| Common
Stock | |
Lorraine
D’Alessio | |
| 36,667 | | |
| * | |
| Common
Stock | |
Alex
P. Hamilton | |
| 26,667 | | |
| * | |
| Common
Stock | |
Dr.
Kenny Myers | |
| 36,667 | | |
| * | |
| | |
| |
| | | |
| | |
| | |
All
executive officers and directors as a group (7 persons) | |
| 1,135,003 | (1) | |
| 11.48 | % |
| | |
| |
| | | |
| | |
| Greater
than 5% Stockholders | |
| |
| | | |
| | |
| Common Stock | |
Greenfield Investments, Ltd. | |
| 515,000 | | |
| 5.21 | % |
| Common
Stock | |
Propre
Energie, Inc(3) | |
| 650,000 | | |
| 6.58 | % |
| Common
Stock | |
Navy
Wharf, Ltd(4) | |
| 1,000,000 | | |
| 10.12 | % |
*
Less than 1%.
| (1) |
A
total of 605,000 of the outstanding shares of common stock beneficially owned by Mr. Cohen are held in the name of The Tiger Cub
Trust, which is beneficially owned by Jacob D. Cohen, its Trustee, and which shares Mr. Cohen is deemed to beneficially own. Includes
33,333 shares of common stock issuable upon exercise of options to purchase shares of common stock of the Company held by Mr. Cohen,
with an exercise price of $16.50 per share, and does not include options to purchase 16,667 shares of common stock which an exercise
price of $16.50 per share, which vest on September 1, 2025, and expire on August 31, 2027, and also includes options to purchase
83,333 shares of common stock with an exercise price of $4.80 per share and an expiration date of December 28, 2028. |
| |
|
| (2) |
Includes
options to purchase 3,333 shares of common stock with an exercise price of $16.50 per share and an expiration date of May 1, 2033,
and does not include options to purchase 6,667 shares of common stock with an exercise price of $16,50 per share, which vest at the
rate of 1/2 of such options on each of May 1, 2025 and 2026, which have not vested as of the Date of Determination. |
| |
|
| (3) |
Address:
12 Four Oaks Gate Toronto Ontario M4J 2X2 Canada. The shares held by Propre Energie, Inc. may be beneficially owned by Peter Polimeneas,
its Director. |
| |
|
| (4) |
Address:
Four Oaks Gate Toronto Ontario M4J 2X2 Canada. The shares of Common Stock held by Navy Wharf, Ltd. may be deemed to be beneficially
owned by Marvalyn Smith, its President. |
Change
of Control
The
Company is not aware of any arrangements which may at a subsequent date result in a change of control of the Company.
Equity
Compensation Plan Information
The
following table provides information as of December 31, 2024 regarding the Company’s 2022 Equity Incentive Plan, as amended, under
which equity securities are authorized for issuance:
| Plan
Category | |
Number of
securities
to be issued
upon
exercise of
outstanding
options,
warrants and
rights | | |
Weighted-
average
exercise
price
of
outstanding
options,
warrants
and
rights | | |
Number of
securities
available for
future
issuance under
equity
compensation plans
(excluding those in
first column) | |
| Equity
compensation plans approved by the security holders (1) | |
| 156,666 | | |
$ | 9.34 | | |
| 111 | |
| Equity
compensation plans not approved by the security holders | |
| - | | |
| - | | |
| - | |
| Total | |
| 156,666 | | |
$ | 9.34 | | |
| 111 | |
| (1) |
Represents
options issuable upon grants previously made under the Company’s 2022 Equity Incentive Plan, as amended, which is discussed
under “Executive Compensation-2022 Equity Incentive Plan.” |
MANAGEMENT
Executive
Officers and Directors
The
following table sets forth information with respect to persons who are serving as directors and executive officers of the Company as
of May 27, 2025.
| Name | |
Position | |
Age | | |
Director
Since | |
| Jacob
D. Cohen | |
Chairman
and Chief Executive Officer | |
45 | | |
October
2021 | |
| Antonios
“Tony” Isaac | |
President
and Director | |
70 | | |
January
2025 | |
| Eugene
M. Johnston | |
Chief
Financial Officer | |
61 | | |
- | |
| Amanda
Hammer | |
Chief
Operating Officer | |
39 | | |
- | |
| Lorraine
D’Alessio | |
Director | |
45 | | |
October
2022 | |
| Alex
P. Hamilton | |
Director | |
52 | | |
October
2022 | |
| Dr.
Kenny Myers | |
Director | |
58 | | |
October
2022 | |
Business
Experience
The
following is a brief description of the education and business experience of our directors and executive officers.
Jacob
D. Cohen - Chairman and Chief Executive Officer
Jacob
Cohen is a serial entrepreneur, corporate finance and executive management professional with over 20 years of investment banking and
capital markets experience having started and growing multiple companies in various industry sectors including marketing, advertising,
healthcare, IT and financial services. Prior to founding the Company, Mr. Cohen was the co-founder and managing partner of several boutique
investment bank and strategic advisory firms where he advised both early and later stage companies in raising capital in the form of
debt and/or equity and in both private and public markets.
Prior
to his experiences in investment banking, Mr. Cohen served as the Chief Financial Officer of The Renewed Group, Inc., a manufacturer,
wholesaler and retailer of eco-friendly and sustainable apparel primarily made from recycled textiles and under the brand name REUSE
JEANS from 2010 through the end of 2013. Further, Mr. Cohen served from 2008 through 2010 as Executive Vice President and Controller
of Metiscan, Inc., a publicly-traded company, and as the President and Chief Executive Officer of one of its subsidiaries, Shoreline
Employment Services, Inc. During his tenure at Metiscan, Mr. Cohen was instrumental in restructuring, reorganizing and operating the
company and its five subsidiaries, and successfully raised over $8 million in equity financing for growth capital. Mr. Cohen also spearheaded
the company’s financial audit process and managed its various filings with the SEC.
From
2007 through 2008, Mr. Cohen served as the Chief Operating Officer of Artfest International, which he assisted in taking public at the
end of 2007. Throughout his career, Mr. Cohen was involved in starting many new ventures, including The AdvertEyes Network, a digital
signage advertising company where he served as founder and CEO. Other positions include investment advisor and institutional equity research
analyst for Solomon Advisors and Huberman Financial, securities broker-dealers, from 2003 through 2005, and investment banker for Allegiance
Capital, a middle market investment bank specializing on mergers and acquisitions, from 2005-2007. Mr. Cohen holds a Bachelor of Arts
in International Economics and Finance from Brandeis University in Waltham, Massachusetts.
Mr.
Cohen has served as Chief Executive Officer of the Company since October 2021, as a director from October 2021 to present, and as Chairman
from September 2022 to present. Mr. Cohen also currently serves as a director of American International, a publicly-traded company which
was the majority owner and parent to Epiq Scripts, LLC prior to February 15, 2023, and which is the former sole owner of the Company,
having fully divested its ownership in June 2022. Mr. Cohen served as Chief Executive Officer and President of American International
from April 2019 to March 2023. Cohen also serves as Chief Executive Officer of Ronin Equity Partners, Inc., a private investment company,
which role he has held since August 2016. Mr. Cohen also serves the Chief Executive Officer of Cohen Enterprises, Inc., a private investment
company, which position he has held since November 2013. Since February 15, 2023, Mr. Cohen has owned 51% of and controlled, Epiq Scripts.
Mr. Cohen has served as the co-Manager of Epiq Scripts since January 2022.
We
believe that Mr. Cohen’s extensive background in investment banking, public company management and corporate finance makes him
well qualified to serve on the Board of Directors.
Antonios
(Tony) Isaac - President and Director
Antonios
(Tony) Isaac was elected as a director of the Company effective January 15, 2025. Mr. Isaac has been a director of Alt5 Sigma (Nasdaq:
ALTS), which operates a next generation blockchain platform, since May 2015, Chief Executive Officer of Alt5 Sigma since May 2016, and
President of Alt5 Sigma since August 2024. Mr. Isaac served as Financial Planning and Strategist/Economist of Live Ventures Incorporated
(Nasdaq: LIVE), a holding company for diversified businesses, from March 2012 to May 2015. He is the Chairman and Co-Founder of the Isaac
Organization, a privately held investment company.
Mr.
Isaac has invested in various companies, both private and public, from 1981 to the present. His specialty is negotiation and problem-solving
in complex real estate and business transactions. Mr. Isaac has served as a director of Live Ventures Incorporated since December 2011.
He graduated from Ottawa University in 1981, where he majored in Commerce, Business Administration, and Economics.
We
have concluded that Mr. Isaac is well qualified to serve on our Board of Directors based upon his significant business experience and
public company background and knowledge.
Eugene
M. Johnston - Chief Financial Officer
Mr.
Johnston has served as Chief Financial Officer of the Company since October 2022. Since February 2015, Mr. Johnston has served as Audit
Manager for Greentree Financial Group, Inc., an accounting and auditing firm. From August 1999 to September 2014, Mr. Johnston served
as Chief Executive Officer of Peoplesway.com, Inc., a skincare and nutritional products company, and from August 1999 to present, Mr.
Johnston has served as a member of the Board of Directors of Peoplesway.com, Inc. From January 1999 to July 1999, Mr. Johnston served
as Chief Executive Officer of RMC Group, Inc., a skincare and nutritional products company. Prior to that, from April 1987 to January
1989, Mr. Johnston served as Vice President of Sales Administration at WeCare Distributors, Inc., a skincare and nutritional products
company. Mr. Johnston received a Bachelor’s in Science in Business Administration from the University of North Carolina Charlotte.
Amanda
Hammer - Chief Operating Officer
Mrs.
Hammer has served as the Company’s Chief Operating Officer since May 2023 and as director of e-Commerce from October 2022 to May
2023. Prior to that, she served in various roles with D Magazine Partners, a media/publishing company, including Chief Operating Officer
(December 2021 to September 2022); Audience Development and Digital Operations Director (July 2019 to November 2021); and Audience Development
Director (August 2018 to June 2019). From February 2018 to July 2018, Mrs. Hammer served as a Sales Consultant with Liberty Mutual insurance.
From October 2014 to October 2017, Mrs. Hammer served as Director of Membership and Product Development at McKissock LLC, a professional
development / e-learning company. Prior to that, from August 2008 to September 2014, she served as Training and Membership Director at
The Institute for Luxury Home Marketing, a real estate / professional association. Mrs. Hammer obtained dual Bachelor of Arts degrees
(i) with a concentration in Graphic Design, and (ii) in Communication Studies, from the University of Iowa. She has also obtained a Negotiation
and Leadership Certificate from Harvard Law School. She is a member of the Texas Women’s Foundation and the MetroTex Young Professionals
Network.
Independent
Directors
Lorraine
D’Alessio - Director
Lorraine
D’Alessio was elected as a director of the Company effective October 14, 2022. From January 2022 to March 2023, Ms. D’Alessio
has served as a member of the Board of Directors and member of the Audit Committee of the Board of Directors of American International.
Since
2010, Ms. D’Alessio has served as CEO and Managing Partner at D’Alessio Law Group, PLC, a law firm in Beverly Hills, California
which provides immigration and entertainment law services. In that capacity, she has provided counsel to entertainment agencies, unions,
private companies, academic institutions, tech startups, entrepreneurs and enterprises including: Next Models, Food Network, SubPac,
Pepperdine University, ACTRA, New York Film Academy, Plug and Play, Expert Dojo, and 500 Startups.
Ms.
D’Alessio was named the 2017 Leader in Law by the Los Angeles Business Journal and is the recipient of the 2018 Enterprising Woman
Award. Since 2016, Ms. D’Alessio has also served on the board of directors of Artists for Change, a non-profit organization which
focuses on creating high impact film, television, and multimedia projects to inspire individuals, organizations, and communities to bring
about positive social change.
From
2005 to 2007, Ms. D’Alessio served as a policy analyst and advisor for the government of Ontario, Canada.
Ms.
D’Alessio received her Bachelor’s degree in International Relations from the University of Toronto in 2005, a Master’s
of Public Policy in Public Policy Administration from Queen’s University, in Kingston, Ontario in 2006, and a Juris Doctorate degree
from Southwestern Law School in Los Angeles, California in 2010.
The
Board of Directors believes that Ms. D’Alessio is well qualified to serve on the Board of Directors because of her legal expertise
and extensive knowledge of corporate governance and controls.
Alex
P. Hamilton - Director
Alex
P. Hamilton was elected as a director of the Company effective October 14, 2022.
In
April 2016, Mr. Hamilton founded Hamilton Laundry, a boutique laundromat that serves high-end luxury commercial companies, and has served
as its chief executive officer since then. He has also served as Chief Executive Officer of Hamilton Strategy Group, Inc., a consulting
firm, since November 2014. Mr. Hamilton is also the Co-Founder of Donald Capital LLC, a FINRA registered investment banking firm, and
has served as its president since May 2019. Since May 2021, Mr. Hamilton has served as a member of the Board of Directors, the Chairman
of the Audit Committee and member of the Corporate Governance and Nominating Committee of Addentax Group Corp. (ATXG:Nasdaq), an integrated
service provider focusing on garment manufacturing, logistics service, property management and subleasing, and epidemic prevention supplies.
From February 2017 to July 2019, Mr. Hamilton served as Chief Financial Officer of Hemp Logic, Inc. From December 2018 to February 2019,
Mr. Hamilton served as the Interim Chief Financial Officer of ChineseInvestors.com, Inc. From December 2020 to July 2021, Mr. Hamilton
served as a non-executive Board Member, Chairman of the Audit Committee and Member of the Nominating and Compensation Committee of Meiwu
Technology Co., LTD (WNW:Nasdaq). Mr. Hamilton, served as the Chief Financial Officer and Director of CBD Biotech, Inc. from November
2018 to February 2021. From January 2015 to May 2019, Mr. Hamilton served as Senior Managing Director of Consilium Global Research. From
November 2013 to November 2014, Mr. Hamilton was the president of Kei Advisors. From November 2012 to November 2013, Mr. Hamilton served
as Senior Director of FTI Consulting, a management consulting company. Prior to that, Mr. Hamilton served as managing director of Early
Bird Capital (August 2010 to September 2012) and Jesup & Lamont (July 2007 to February 2010), and as a Vice President of The Benchmark
Company (February 2006 to July 2007). Mr. Hamilton holds his Series 7, 24 and 63 licenses. Mr. Hamilton received a Batchelor’s
Degree in Economics from Brandeis University in Waltham, Massachusetts.
The
Board of Directors believes that Mr. Hamilton is well qualified to serve on the Board of Directors because of his extensive business
knowledge, public company experience and experience serving in various positions with investment management firms.
Dr.
Kenny Myers - Director
Dr.
Kenny Myers was elected as a director of the Company effective October 14, 2022. From January 2022 to March 2023, Dr. Myers has served
as a member of the Board of Directors and Audit Committee of American International.
Since
March 2020, Dr. Myers has served as VP of Business Development for Living Fit Nation, Inc., a corporate wellness provider which designs
and implements customized employee health and wellness programs for corporations around the United States. From March 2012 to February
2020, Dr. Myers worked as VP of Business Development at One Health Medical Systems, LLC, an integrated health services provider, where
he was responsible for overseeing the planning, development and execution of the organization’s marketing and advertising initiatives.
From May 1998 to March 2012, Dr. Myers was CEO of Texas Physicians Network, a healthcare management company where he was responsible
for the marketing and management of several urgent care centers, medical clinics and other related healthcare facilities.
Dr.
Myers received his Bachelor of Science degree in Microbiology from Oklahoma University in 1989, and a Doctor of Chiropractic Degree from
Parker University in Dallas, Texas in 1996.
The
Board of Directors believes that Dr. Myers is well qualified to serve on the Board of Directors because of his background in the health
services industry and his experience in business marketing and development.
Terms
of Office of Officers and Directors
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until December 31, 2024, one
fiscal year following our listing on Nasdaq. The term of office of our directors will expire at our first annual meeting of shareholders,
subject to re-nomination and reappointment to the board by our shareholders.
Our
officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors, rather than for specific terms
of office. Our Board of Directors is authorized to appoint persons to the offices set forth in our Bylaws as it deems appropriate. Our
Bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President,
Vice Presidents, Secretary, Treasurer, Assistant Secretaries and such other offices as may be determined by the Board of Directors.
Corporate
Governance
Family
Relationships among Directors and Officers
There
are no family relationships among our directors and executive officers.
Arrangements
between Directors and Officers
To
our knowledge, there is no arrangement or understanding between any of our officers or directors and any other person, including directors,
pursuant to which the officer was selected to serve as an officer or director.
Involvement
in Certain Legal Proceedings
None
of our executive officers or directors has been involved in any of the following events during the past ten years: (1) any bankruptcy
petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy
or within two years prior to that time; (2) any conviction in a criminal proceeding or being a named subject to a pending criminal proceeding
(excluding traffic violations and minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a civil
action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law; (5)
being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation;
(ii) any law or regulation respecting financial institutions or insurance companies, including, but not limited to, a temporary or permanent
injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order, or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(6) being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section (1a)(40) of the Commodity
Exchange Act), or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons
associated with a member.
Board
Leadership Structure
Our
Board of Directors has the responsibility for selecting the appropriate leadership structure for the Company. In making leadership structure
determinations, the Board of Directors considers many factors, including the specific needs of the business and what is in the best interests
of the Company’s shareholders. Our current leadership structure is comprised of a combined Chairman of the Board and Chief Executive
Officer (“CEO”), Mr. Jacob D. Cohen. The Board of Directors believes that this leadership structure is the most effective
and efficient for the Company at this time. Mr. Cohen possesses detailed and in-depth knowledge of the issues, opportunities, and challenges
facing the Company, and is thus best positioned to develop agendas that ensure that the Board of Directors’ time and attention
are focused on the most critical matters. Combining the Chairman of the Board and CEO roles promotes decisive leadership, fosters clear
accountability and enhances the Company’s ability to communicate its message and strategy clearly and consistently to our shareholders,
particularly during periods of turbulent economic and industry conditions.
Risk
Oversight
Effective
risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision,
the Board of Directors discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’
approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s
risk management processes, allocating responsibilities for risk oversight, and fostering an appropriate culture of integrity and compliance
with legal responsibilities. The directors exercise direct oversight of strategic risks to the Company.
The
Audit Committee reviews and assesses the Company’s processes to manage business and financial risk and financial reporting risk.
It also reviews the Company’s policies for risk assessment and assesses steps management has taken to control significant risks.
Other
Directorships
No
director of the Company is also a director of an issuer with a class of securities registered under Section 12 of the Exchange Act (or
which otherwise are required to file periodic reports under the Exchange Act), except for Mr. Alex Hamilton who serves as a member of
the Board of Directors, the Chairman of the Audit Committee and member of the Corporate Governance and Nominating Committee, of Addentax
Group Corp. (NASDAQ:ATXG).
Committees
of the Board
Our
Board of Directors has three standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance
Committee.
Board
Committee Membership
Committee
membership of the Board of Directors is as follows:
| | |
Independent | | |
Audit Committee | | |
Compensation
Committee | | |
Nominating and Corporate Governance Committee | |
| Jacob D. Cohen(1) | |
| | | |
| | | |
| | | |
| | |
| Lorraine D’Alessio | |
| X | | |
| M | | |
| M | | |
| C | |
| Alex P. Hamilton | |
| X | | |
| C | | |
| | | |
| | |
| Dr. Kenny Myers | |
| X | | |
| M | | |
| C | | |
| M | |
| (1) |
Chairman
of Board of Directors. |
| C
|
Chairman
of Committee. |
| M
|
Member. |
Audit
Committee
We
have established an Audit Committee of the Board of Directors. Ms. D’Alessio, Mr. Hamilton and Dr. Meyers serve as members of our
Audit Committee, and Mr. Hamilton chairs the Audit Committee. Under the Nasdaq listing standards and applicable SEC rules, we are required
to have at least three members of the Audit Committee, all of whom must be independent. The Board of Directors has determined that each
of Ms. D’Alessio, Mr. Hamilton and Dr. Meyers meet the independent director standard under Nasdaq listing standards and under Rule
10-A-3(b)(1) of the Exchange Act.
The
Board has determined that Mr. Hamilton, is an “audit committee financial expert” (as defined in the SEC rules) because he
has the following attributes: (i) an understanding of generally accepted accounting principles in the United States of America (“GAAP”)
and financial statements; (ii) the ability to assess the general application of such principles in connection with accounting for estimates,
accruals and reserves; (iii) experience analyzing and evaluating financial statements that present a breadth and level of complexity
of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised
by our consolidated financial statements; (iv) an understanding of internal control over financial reporting; and (v) an understanding
of Audit Committee functions. Mr. Hamilton has acquired these attributes as a result of his significant experience serving on the Board
of Directors of various private and public companies and the Co-Founder and president of Donald Capital LLC, a FINRA registered investment
banking firm.
We
have adopted an Audit Committee Charter, which details the principal functions of the Audit Committee, including:
| ● |
the
appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm
engaged by us; |
| |
|
| ● |
pre-approving
all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and
establishing pre-approval policies and procedures; |
| |
|
| ● |
setting
clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited
to, as required by applicable laws and regulations; |
| |
|
| ● |
setting
clear policies for audit partner rotation in compliance with applicable laws and regulations; |
| |
|
| ● |
obtaining
and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent
registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent
internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken
to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the
independent registered public accounting firm’s independence; |
| |
|
| ● |
reviewing
and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC
prior to us entering into such transaction; and |
| |
|
| ● |
reviewing
with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory
or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published
reports that raise material issues regarding our consolidated financial statements or accounting policies and any significant
changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
The
Audit Committee also has the sole authority, at its discretion and at our expense, to retain, compensate, evaluate and terminate our
independent auditors and to review, as it deems appropriate, the scope of our annual audits, our accounting policies and reporting practices,
our system of internal controls, our compliance with policies regarding business conduct and other matters. In addition, the Audit Committee
has the authority, at its discretion and at our expense, to retain special legal, accounting or other advisors to advise the Audit Committee.
Compensation
Committee and Nominating and Corporate Governance Committee
We
have established a Compensation Committee of the Board of Directors. Ms. D’Alessio and Dr. Meyers serve as members of our Compensation
Committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the Compensation
Committee, all of whom must be independent. Each of Ms. D’Alessio and Dr. Meyers are independent, and Dr. Meyer’s chairs
the Compensation Committee.
We
have adopted a Compensation Committee Charter, which details the principal functions of the Compensation Committee, including:
| ● |
reviewing
and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation,
if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining
and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
| |
|
| ● |
reviewing
and approving on an annual basis the compensation, if any is paid by us, of all of our other officers; |
| |
|
| ● |
reviewing
on an annual basis our executive compensation policies and plans; |
| ● |
implementing
and administering our incentive compensation equity-based remuneration plans; |
| |
|
| ● |
assisting
management in complying with our proxy statement and annual report disclosure requirements; |
| |
|
| ● |
approving
all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; |
| |
|
| ● |
if
required, producing a report on executive compensation to be included in our annual proxy statement; and |
| |
|
| ● |
reviewing,
evaluating and recommending changes, if appropriate, to the remuneration for directors. |
The
charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such
adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the
Compensation Committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Nominations
for Directors
We
have established a Nominating and Corporate Governance Committee. The members of our nominating and corporate governance are Ms. D’Alessio
and Dr. Meyers and Ms. D’Alessio serves as chair of the Nominating and Corporate Governance Committee.
The
primary purposes of our Nominating and Corporate Governance Committee are to assist the board in:
| ● |
identifying,
screening and reviewing individuals qualified to serve as directors and recommending to the Board of Directors candidates for nomination
for election at the annual meeting of shareholders or to fill vacancies on the Board of Directors; |
| |
|
| ● |
developing,
recommending to the Board of Directors and overseeing implementation of our corporate governance guidelines; |
| |
|
| ● |
coordinating
and overseeing the annual self-evaluation of the Board of Directors, its committees, individual directors and management in the governance
of the company; and |
| |
|
| ● |
reviewing
on a regular basis our overall corporate governance and recommending improvements as and when necessary. |
The
Nominating and Corporate Governance Committee is governed by a charter that complies with the rules of the Nasdaq.
Our
Nominating and Corporate Governance Committee will recommend to the Board of Directors candidates for nomination for election at the
annual meeting of the shareholders. The Board of Directors will also consider director candidates recommended for nomination by our shareholders
during such times as they are seeking proposed nominees to stand for election at the next annual meeting of shareholders (or, if applicable,
a special meeting of shareholders).
We
have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess.
In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of
professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent
the best interests of our shareholders.
Director
Independence
Nasdaq
listing standards require that a majority of our Board of Directors be independent. An “independent director” is defined
generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship
which in the opinion of the company’s Board of Directors, would interfere with the director’s exercise of independent judgment
in carrying out the responsibilities of a director. Our Board of Directors has determined that all of our directors, other than Mr. Cohen,
are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors
have regularly scheduled meetings at which only independent directors are present.
In
assessing director independence, the Board considers, among other matters, the nature and extent of any business relationships, including
transactions conducted, between the Company and each director and between the Company and any organization for which one of our directors
is a director or executive officer or with which one of our directors is otherwise affiliated.
Shareholder
Communications with the Board
A
shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our Secretary,
15110 N. Dallas Parkway, Suite 600, Dallas, Texas 75248, who, upon receipt of any communication other than one that is clearly marked
“Confidential,” will note the date the communication was received, open the communication, make a copy of it for our files
and promptly forward the communication to the director(s) to whom it is addressed. Upon receipt of any communication that is clearly
marked “Confidential,” our Secretary will not open the communication, but will note the date the communication was received
and promptly forward the communication to the director(s) to whom it is addressed.
Policy
on Equity Ownership
The
Company does not have a policy on equity ownership at this time.
Policy
against Hedging
The
Company recognizes that hedging against losses in Company shares may disturb the alignment between shareholders and executives that equity
awards are intended to build; however, while ‘short sales’ are discouraged by the Company, the Company does not currently
have a policy prohibiting such transactions. We plan to implement a policy prohibiting such transactions in the future.
Compensation
Recovery
On
October 26, 2023, the Board of Directors of the Company approved the adoption of a Policy for the Recovery of Erroneously Awarded Incentive
Based Compensation (the “Clawback Policy”), with an effective date of October 2, 2023, in order to comply with the
final clawback rules adopted by the Securities and Exchange Commission under Section 10D and Rule 10D-1 of the Securities Exchange Act
of 1934, as amended (“Rule 10D-1”), and the listing standards, as set forth in the Nasdaq Listing Rule 5608 (the “Final
Clawback Rules”).
The
Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from current and former executive
officers as defined in Rule 10D-1 (“Covered Officers”) of the Company in the event that the Company is required to
prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless
of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement.
Under the Clawback Policy, the Board of Directors may recoup from the Covered Officers erroneously awarded incentive compensation received
within a lookback period of the three completed fiscal years preceding the date on which the Company is required to prepare an accounting
restatement.
Code
of Ethics
We
have adopted a Code of Ethical Business Conduct (“Code of Ethics”) that applies to all of our directors, officers and employees.
We intend to disclose any amendments to our Code of Ethics and any waivers with respect to our Code of Ethics granted to our principal
executive officer, our principal financial officer, or any of our other employees performing similar functions in a Current Report on
Form 8-K.
There
have been no waivers granted with respect to our Code of Ethics to any such officers or employees.
Whistleblower
Protection Policy
The
Company adopted a Whistleblower Protection Policy (“Whistleblower Policy”) that applies to all of its directors, officers,
employees, consultants, contractors and agents of the Company. The Whistleblower Policy has been reviewed and approved by the Board.
Board
Diversity
While
we do not have a formal policy on diversity, our Board of Directors considers diversity to include the skill set, background, reputation,
type and length of business experience of our board members as well as a particular nominee’s contributions to that mix. Our Board
of Directors believes that diversity promotes a variety of ideas, judgments and considerations to the benefit of our Company and shareholders.
EXECUTIVE
COMPENSATION
Summary
Executive Compensation Table
The
following table sets forth information concerning the compensation of (i) all individuals serving as our principal executive officer
or acting in a similar capacity for the years ended December 31, 2024 and 2023 (“PEO”), regardless of compensation
level; (ii) our two most highly compensated executive officers other than the PEO who were serving as executive officers for the years
ended December 31, 2024 and 2023, if any (subject to the limitations below); and (iii) up to two additional individuals for whom disclosure
would have been provided pursuant to (ii) but for the fact that the individual was not serving as an executive officer at December 31,
2024 or 2023 (collectively, the “Named Executive Officers”).
| Name and Principal Position | |
Fiscal Year | | |
Salary ($) | | |
Bonus ($) | | |
Stock Awards
($)(1) | | |
Option Awards
($)(1) | | |
All Other Compensation
($)(2) | | |
Total ($) | |
| Jacob D. Cohen | |
| 2024 | | |
| 320,000 | | |
| - | | |
| 280,000(3) | | |
| - | | |
| 30,000 | (9) | |
| 630,000 | |
| CEO and Chairman | |
| 2023 | | |
| 260,000 | | |
| - | | |
| - | | |
| 362,238 | (8) | |
| 18,000 | (9) | |
| 598,256 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Jonathan Arango | |
| 2024 | | |
| 41,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 41,000 | |
| Former President, Secretary
and Director(10) | |
| 2023 | | |
| 120,000 | | |
| 5,000 | | |
| - | | |
| - | | |
| - | | |
| 125,000 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Eugene M. Johnston | |
| 2024 | | |
| 46,000 | | |
| 10,000 | | |
| 61,750 | (4) | |
| - | | |
| - | | |
| 117,750 | |
| CFO | |
| 2023 | | |
| 14,000 | | |
| - | | |
| 42,500 | (5) | |
| - | | |
| - | | |
| 56,500 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Amanda Hammer | |
| 2024 | | |
| 150,000 | | |
| - | | |
| 35,000 | (6) | |
| - | | |
| - | | |
| 185,000 | |
| COO | |
| 2023 | | |
| 105,417 | | |
| - | | |
| 75,000 | (7) | |
| 149,014 | (7) | |
| - | | |
| 329,431 | |
| (1) |
In
accordance with SEC rules, the amounts included in this column are the grant date fair value for awards granted in the fiscal years
shown, computed in accordance with the stock-based compensation accounting rules that are a part of generally accepted accounting
principles in effect in the United States (as set forth in Financial Accounting Standards Board’s Accounting Standards Codification
Topic 718), but excluding the effect of any estimated forfeitures of such awards. The values in this column reflect the full grant
date fair value of all equity awards granted during the year, although the awards are subject to vesting periods based on continued
employment. |
| |
|
| (2) |
Does
not include perquisites and other personal benefits or property, unless the aggregate amount of such compensation is more than $10,000.
No executive officer earned any non-equity incentive plan compensation or nonqualified deferred compensation during the periods reported
above. No executive officer serving as a director received any compensation for services on the Board of Directors separate from
the compensation paid as an executive for the periods above. |
| |
|
| (3) |
On
June 4, 2024, Mr. Cohen was issued 53,333 shares of common stock as one time stock grant at a price of $5.25 per share. On August 31, 2022, in consideration for agreeing to an employment agreement with the Company, Mr. Cohen received
a sign-on bonus of options to purchase 50,000 shares of common stock of the Company, with an exercise price of $16.50 per share, with
options to purchase 50,000 shares vesting every 12 months that the agreement is in effect, beginning September 1, 2023. The options have
a term of five years. |
| |
|
| (4) |
On November 12, 2024, Mr. Johnston was issued 25,000 shares of common stock as one time stock grant at a price of
$2.47 per share. |
| |
|
| (5) |
On
October 3, 2023, in consideration for agreeing to a consulting agreement with the Company, Mr. Johnston received 3,333 shares of
common stock of the Company. The shares were valued at $12.75 per share for a total of $42,500. |
| |
|
| (6) |
On
June 4, 2024, Ms. Hammer was issued 6,667 shares of common stock as one time stock grant at a price of $5.25 per share. |
| |
|
| (7) |
On
May 1, 2023, in consideration for agreeing to an employment agreement with the Company, Ms. Hammer received a sign-on bonus of 5,000
shares of common stock of the Company. The shares were valued at $15.00 per share for a total of $75,000. Additionally, Ms. Hammer
received options to purchase 10,000 shares of common stock of the Company, with an exercise price of $16.50 per share, with options
to purchase 3,333 shares vesting every 12 months that the agreement is in effect, beginning May 1, 2024. The options have a term
of five years. |
| |
|
| (8) |
On
December 28, 2023, in consideration for services rendered for the Company, Mr. Cohen received options to purchase 83,334 shares of
common stock of the Company, with an exercise price of $4.80 per share with all options being deemed vested as of the date of grant.
The options have a term of five years. |
| |
|
| (9) |
Pursuant
to Mr. Cohen’s employment agreement, Mr. Cohen is provided a car allowance of $2,500 per month for a total of $30,000. |
| |
|
| (10) |
Resigned
as an officer and director of the Company on March 28, 2024. |
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth information as of December 31, 2024 concerning outstanding equity awards for the executive officers named
in the Summary Compensation Table.
| | |
Option Awards | | |
Stock Awards | |
| Name | |
Number of securities underlying unexercised options (#) exercisable | | |
Number of securities underlying unexercised options (#) unexercisable | | |
Option Exercise price
($) | | |
Option expiration date | | |
Number of shares or units of stock that have not vested
(#) | | |
Market value of shares or units of stock that have not vested
($) | |
Jacob D.
Cohen | |
| 33,333 | | |
| 16,667 | (1) | |
$ | 16.50 | | |
| 9/1/2027 | | |
| - | | |
$ | - | |
| | |
| 83,333 | | |
| - | | |
$ | 4.80 | | |
| 12/28/2028 | | |
| - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Eugene M.
Johnston | |
| - | | |
| - | | |
$ | - | | |
| - | | |
| - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Amanda
Hammer | |
| 3,333 | | |
| 6,667 | (2) | |
$ | 16.50 | | |
| 5/1/2033 | | |
| - | | |
$ | - | |
| |
(1) |
On
August 31, 2022, in consideration for agreeing to an employment agreement with the Company, Mr. Cohen received a sign-on bonus of
options to purchase 50,000 shares of common stock of the Company, with an exercise price of $16.50 per share, with options to purchase
16,667 shares vesting every 12 months that the agreement is in effect, beginning September 1, 2023. The options have a term of five
years. |
| |
|
|
| |
(2) |
Ms.
Hammer was granted options to purchase 10,000 shares of common stock of the Company in May 2023, with an exercise price of $16.50
per share, with options to purchase 3,333 shares vesting every 12 months, subject to her continued employment. |
Employment
and Consulting Agreements
Jacob
D. Cohen, Chief Executive Officer
On
August 31, 2022, we entered into an Executive Employment Agreement with Jacob D. Cohen. The agreement, which provides for Mr. Cohen to
serve as our Chief Executive Officer, was effective September 1, 2022, and has a term extending through September 1, 2025, provided that
the agreement automatically renews for additional one-year terms thereafter in the event neither party provides the other at least 60
days prior notice of their intention not to renew the terms of the agreement.
Pursuant
to the terms of the agreement, Mr. Cohen’s annual compensation package currently includes (a) a base salary of $300,000 per year
($180,000 per year through May 1, 2023), subject to automatic annual increases of $60,000 each year the agreement is in place, and subject
to further increases as determined in the sole discretion of the Compensation Committee or the Board of Directors, and (b) a bonus payment
to be determined in the sole discretion of the Compensation Committee or the Board of Directors in an annual targeted amount of 200%
of his base salary (the “Targeted Bonus”), subject to the compliance by Mr. Cohen with performance goals that may
be established by the Compensation Committee or the Board of Directors from time to time, provided no goals have been established to
date, and that in the absence of performance goals, the amount of such bonus would be wholly determined in the discretion of the Compensation
Committee or the Board of Directors. Mr. Cohen is also paid an automobile allowance of $1,500 per month during the term of the agreement
and is eligible to participate in our stock option plan and other benefit plans.
In
consideration for agreeing to the terms of the agreement, Mr. Cohen received a sign-on bonus of options to purchase 750,000 shares of
common stock of the Company, with an exercise price of $1.10 per share, with options to purchase 250,000 shares vesting every 12 months
that the agreement is in effect. The options have a term of five years.
Mr.
Cohen’s compensation under his employment agreement may be increased from time to time, by the Compensation Committee, or the Board
of Directors (with the recommendation of the Compensation Committee), which increases do not require the entry into an amended employment
agreement. Mr. Cohen may also receive bonuses from time to time, in the discretion of the Board and/or Compensation Committee in cash,
stock, or options.
The
agreement prohibits Mr. Cohen from competing against us during the term of the agreement and for a period of 12 months after the termination
of the agreement in any state and any other geographic area in which we or our subsidiaries provide Restricted Services or Restricted
Products, directly or indirectly, during the 12 months preceding the date of the termination of the agreement. “Restricted Services”
means the or men’s wellness services and any other services and any other services that we or our subsidiaries have provided or
are researching, developing, performing and/or providing at any time during the two years immediately preceding the date of termination,
or which Mr. Cohen has obtained any trade secret or other confidential information about at any time during the two years immediately
preceding the date of termination of the agreement. “Restricted Products” branded men’s wellness products sold
to consumers via a telemedicine platform and any other product and any other product, that we or our subsidiaries have provided or are
researching, developing, manufacturing, distributing, selling and/or providing at any time during the two years immediately preceding
the date the agreement is terminated, or which Mr. Cohen obtained any trade secret or other confidential information in connection with
at any time during the two years immediately preceding the date of termination of the agreement.
We
may terminate Mr. Cohen’s employment (a) for “cause” which means (i) Mr. Cohen materially breaches any obligation,
duty, covenant or agreement under the agreement, which breach is not cured or corrected within 30 days of written notice thereof from
the Company (except for breaches of the assignment of inventions or confidentiality/non-solicitation and non-compete provisions of the
agreement, which cannot be cured and for which the Company need not give any opportunity to cure); or (ii) Mr. Cohen commits any act
of misappropriation of funds or embezzlement; or (iii) Mr. Cohen commits any act of fraud; or (iv) Mr. Cohen is convicted of, or pleads
guilty or nolo contendere with respect to, theft, fraud, a crime involving moral turpitude, or a felony under federal or applicable state
law; and, in the case of any of the above offenses, such offense casts reasonable doubt on Mr. Cohen’s ability to perform his duties
going forward; (b) in the event Mr. Cohen suffers a physical or mental disability which renders him unable to perform his duties and
obligations for either 90 consecutive days or 180 days in any 12-month period; (c) for any reason without “cause”;
(d) upon expiration of the initial term of the agreement (or any renewal) upon notice as provided above, or (e) at any time without cause.
The agreement also automatically terminates upon the death of Mr. Cohen.
Mr.
Cohen may terminate his employment (a) for “good reason” if there is (i) a material diminution in his authority, duties,
or responsibilities; (ii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom Mr. Cohen is
required to report, including, if applicable, a requirement that Mr. Cohen report to an officer or employee of the Company rather than
reporting to the Board; (iii) a material breach by the Company of the agreement, or (iv) a material diminution in Mr. Cohen’s base
salary; provided, however, prior to any such termination by Mr. Cohen for “good reason,” Mr. Cohen must first advise
us in writing (within 90 days of the occurrence of such event) and provide us 30 days to cure, after which in the event we do not cure
the issue leading to such “good reason” notice, Mr. Cohen has 30 days to resign for “good reason”);
(b) for any reason without “good reason”; and (c) upon expiration of the initial term of the agreement (or any renewal)
upon notice as provided above.
If
Mr. Cohen’s employment is terminated due to his death or disability, Mr. Cohen or his estate is entitled to a lump sum cash severance
payment equal to the sum of (i) Mr. Cohen’s base salary accrued through the termination date; (ii) any unpaid cash bonus for the
prior year that would have been paid had Mr. Cohen not been terminated prior to such payment; and (iii) Mr. Cohen’s Targeted Bonus
for the year of termination multiplied by the number of days in such year preceding the termination date divided by 365. Additionally,
and notwithstanding anything to the contrary in any equity agreement, any unvested stock options or equity compensation held by Mr. Cohen
shall vest and shall be exercisable until the earlier of (x) ninety days from the date of termination and (y) the latest date upon which
such stock options or equity would have expired by their original terms under any circumstances.
If
Mr. Cohen’s employment is terminated pursuant to Mr. Cohen without “good reason” or his non-renewal of the agreement,
or by the Company with cause, Mr. Cohen is entitled to his base salary accrued through the termination date and no other benefits other
than continuation of health insurance benefits on the terms and to the extent required by COBRA, or such other similar law or regulation
as may be applicable to the Mr. Cohen or the Company with respect to the Mr. Cohen. Additionally, any unvested stock options or equity
compensation held by Mr. Cohen shall immediately terminate and be forfeited (unless otherwise provided in the applicable award) and any
previously vested stock options (or if applicable equity compensation) shall be subject to terms and conditions set forth in the applicable
equity agreement, as such may describe the rights and obligations upon termination of employment of Mr. Cohen.
If
Mr. Cohen’s employment is terminated by Mr. Cohen for “good reason” or by the Company without “cause”
or due to the Company’s non-renewal, (a) Mr. Cohen is entitled to his base salary accrued through the termination date and any
unpaid cash bonus for the prior completed calendar year that would have been paid had Mr. Cohen not been terminated prior to such payment,
plus a lump sum cash severance payment equal to the sum of (i) an amount equal to Mr. Cohen’s current annual base salary plus (ii)
an amount equal to Mr. Cohen’s Targeted Bonus for the year containing the termination date (the “Severance Payment”);
and (b) provided Mr. Cohen elects to receive continued health insurance coverage through COBRA, the Company will pay Mr. Cohen’s
monthly COBRA contributions for health insurance coverage, as may be amended from time to time (less an amount equal to the premium contribution
paid by active Company employees, if any) for 12 months following the termination date (the “Health Payment”); provided,
however, that if at any time Mr. Cohen is covered by a substantially similar level of health insurance through subsequent employment
or otherwise, the Company’s health benefit obligations shall immediately cease, and the Company shall have no further obligation
to make the Health Payment. Additionally, and notwithstanding anything to the contrary in any equity agreement, any unvested stock options
or equity compensation previously granted to the Mr. Cohen will vest immediately upon such termination and shall be exercisable by the
Mr. Cohen until the earlier of (A) ninety days from the date of termination and (B) the latest date upon which such stock options or
equity would have expired by their original terms under any circumstances.
As
a condition to Mr. Cohen’s right to receive any Severance Payment, (a) Mr. Cohen must execute and deliver to the Company a written
release in form and substance satisfactory to the Company, of any and all claims against the Company and all directors and officers of
the Company with respect to all matters arising out of Mr. Cohen’s employment, or the termination thereof (other than claims for
entitlements under the terms of the agreement or plans or programs of the Company in which Mr. Cohen has accrued a benefit); and (b)
Mr. Cohen must not have breached any of his covenants and agreements under the Agreement relating to assignment of inventions and confidentiality,
including the non-solicitation and non-compete provisions thereof, which shall continue following the Termination Date.
If
a Change of Control (as defined below) occurs during the term of the agreement, or within six months after Mr. Cohen’s termination
of employment by him for good reason or by the Company without cause or upon non-renewal, the Company is required to pay Mr. Cohen, within
60 days following the date of such Change of Control, a cash payment in a lump sum in an amount equal to (x) minus (y) where (x) equals
3.0 times the sum of (a) the current annual base salary of the Mr. Cohen; and (b) the amount of the most recent cash bonus paid to the
Mr. Cohen (collectively (a) and (b), the “Change of Control Payment”) and (y) equals the amount of any severance payment
actually paid to Mr. Cohen in connection with a non-Change of Control termination, as discussed above). In the event the Compensation
Committee has not previously made a determination regarding cash bonus or the most recent cash bonus was zero, the “amount of
the most recent cash bonus paid to the Mr. Cohen” is instead equal to “the targeted bonus for the year in which the
Change in Control occurs.” Additionally, following a change of control termination, all outstanding stock options and other
equity compensation held by Mr. Cohen are exercisable by the Mr. Cohen pursuant to the terms thereof until the earlier of (a) ninety
(90) days from his termination date and (b) the latest date upon which such stock options and other equity compensation would have expired
by their original terms under any circumstances; provided any equity awards outstanding prior to the entry into the Executive Employment
Agreement continue to be governed by the terms set forth in such award agreements.
“Change
of Control” for the purposes of the agreement means: (a) any person obtaining beneficial ownership representing more than 50%
of the total voting power represented by our then outstanding voting securities without the approval of not fewer than two-thirds of
our Board of Directors; (b) a merger or consolidation of us whether or not approved by our Board of Directors, other than a merger or
consolidation that would result in our voting securities immediately prior thereto continuing to represent at least 50% of the total
voting power outstanding immediately after such merger or consolidation, (c) our shareholders approving a plan of complete liquidation
or an agreement for the sale or disposition by us of all or substantially all of our assets, or (d) as a result of the election of members
to our Board of Directors, a majority of the Board of Directors consists of persons who are not members of the Board of Directors on
September 1, 2022, except in the event that such slate of directors is proposed by a committee of the Board of Directors.
The
agreement contains standard assignment of inventions, indemnification and confidentiality provisions. Further, Mr. Cohen is subject to
non-solicitation covenants during the term of the agreement.
Although
Mr. Cohen will be prohibited from competing with us while he is employed with us, he will only be prohibited from competing for 12 months
after his employment with us ends pursuant to the agreement. Accordingly, Mr. Cohen could be in a position to use industry experience
gained while working with us to compete with us.
Effective
May 1, 2023, the Board of Directors of the Company, with Mr. Jacob Cohen, the Company’s Chief Executive Officer and Chairman, abstaining,
with the recommendation of the Compensation Committee of the Board of Directors of the Company, approved an increase in the annual salary
of Mr. Cohen, from $180,000 to $300,000 per year.
On
August 22, 2024, the Board of Directors of the Company, with the recommendation of the Compensation Committee of the Board of Directors
of the Company, approved an increase in the monthly car allowance payable to Mr. Jacob Cohen, the Chief Executive Officer, pursuant to
the terms of that certain Executive Employment Agreement entered into between the Company and Mr. Cohen on August 31, 2022, from $1,500
to $2,500 per month.
On
December 13, 2024, we entered into an Amended and Restated Executive Employment Agreement with Jacob D. Cohen, our Chief Executive Officer
(the “A&R Agreement”).
The
A&R Agreement, which has an effective date of December 15, 2024, amended that prior Executive Employment Agreement dated September
1, 2022, by and between the Company and Mr. Cohen, as amended to date (the “Prior Agreement”) to among other things
i) expand Mr. Cohen’s duties and obligations to include serving not only as the Chief Executive Officer of the Company, but also
as the Chief Executive Officer of Mango & Peaches; ii) extend the term of Mr. Cohen’s engagement to be for a term of three
years through December 1, 2027; iii) amended certain provisions of the Prior Agreement relating to the definition of “cause”
for termination by the Company and the definition of change of control, to apply in the event that a majority of the members of the Board
of Directors change after December 15, 2024, whether or not the directors are nominated by any committee of the Board of Directors; iv)
increase Mr. Cohen’s base salary to $360,000 per year and provide that any cash bonus or equity bonus earned by Mr. Cohen will
be paid after the end of the fiscal year to which it relates, at the same time and under the same terms and conditions as other executives
of the Company; provided that in no event shall the cash bonus or equity bonus be paid later than March 15th of the fiscal year following
the fiscal year for which it was earned; v) provide for Mr. Cohen to be paid a flat fee allowance of $7,500 per month which is intended
to cover the cost of office space used by Mr. Cohen and all overhead costs associated therewith; vi) provide Mr. Cohen the right to earn
a cash bonus of up to $10,000,000, during the term of the A&R Agreement, based on Mango & Peaches meeting certain milestones
and achievements (the “Mango & Peaches Bonus”) as set forth in greater detail in Exhibit B to the A&R Agreement,
which at the option of Mr. Cohen can be converted into shares of common stock of Mango & Peaches at a conversion rate of $0.50 per
share, as equitably adjusted for stock splits, dividends and recapitalizations of Mango & Peaches. The right to earn any unvested
Mango & Peaches Bonus terminates upon the termination of the A&R Agreement, except (1) if a change of control (as defined in
the A&R Agreement) occurs; (2) if the A&R Agreement is terminated by Mr. Cohen for good reason (as defined in the A&R Agreement);
or (3) if the A&R Agreement is terminated by the Company for a reason other than “cause” (as defined in the A&R
Agreement), in which case the unvested portion of the Mango & Peaches Bonus shall vest in full to Mr. Cohen upon the occurrence of
such change of control or termination, as applicable; vii) increase the severance payable to Mr. Cohen upon a termination of the A&R
Agreement by Mr. Cohen for good reason or without “cause” by the Company, each as described in greater detail in the
A&R Agreement, the sum of (i) an amount equal to three (3) times his then current annual base salary (up from one (1) times previously),
plus (ii) an amount equal to Mr. Cohen’s targeted bonus for the year containing the termination date; and (b) provided Mr. Cohen
elects to receive continued health insurance coverage through COBRA, the Company will pay Mr. Cohen’s monthly COBRA contributions
for health insurance coverage, as may be amended from time to time (less an amount equal to the premium contribution paid by active Company
employees, if any) for twelve (12) months following the termination date; and viii) provide for the compensation payable under the A&R
Agreement to be subject to the Company’s clawback policy, to the extent applicable.
The
A&R Agreement also provided for Mr. Cohen to be issued (a) 1,700,000 shares of the common stock of Mango & Peaches (representing
25.4% of Mango and Peaches’ outstanding shares of common stock); and (b) 100 shares of a to be designated series of Series A Preferred
Stock of Mango & Peaches. The Series A Preferred Stock shares of Mango & Peaches.
The
Company plans to seek ratification of the terms of the A&R Agreement as it relates to the Mango & Peaches shares issuable to
Mr. Cohen at the next meeting of shareholders of the Company.
Antonios
(Tony) Isaac - President
The
Company entered into a Consulting Agreement with Mr. Antonios “Tony” Isaac on January 15, 2025 (the “Isaac
Consulting Agreement”).
Pursuant
to the Isaac Consulting Agreement, Mr. Isaac agreed to serve as the President of the Company and to provide services to the Company as
reasonably requested during the term of the Isaac Consulting Agreement, which is 12 months. As consideration for the services to be provided
by Mr. Isaac under the Isaac Consulting Agreement, the Company agreed to pay him $10,000 per month.
Pursuant
to the Isaac Consulting Agreement, we agreed to reimburse Mr. Isaac’s expenses, subject to pre-approval for any expense greater
than $500.
The
Isaac Consulting Agreement may be terminated prior to the end of the term (i) with the mutual approval of the parties; (ii) with written
notice by the non-breaching party, upon the breach of the agreement by the other party, and the failure to cure such breach within 30
days; or (iii) by Mr. Isaac, at any time, for any reason. The Company may also terminate Mr. Isaac’s position as President of the
Company at any time, for any reason, which shall not operate as a termination of the Isaac Consulting Agreement, but shall only result
in a termination of Mr. Isaac’s role as President of the Company. The Company may also immediately terminate the Isaac Consulting
Agreement for Cause upon written notice of termination to Mr. Isaac, with the particular Cause being specified in such notice. With respect
to a termination by the Company, “Cause” means any of the following in the Company’s reasonable judgment: (i)
Mr. Isaac’s act or acts amounting to gross negligence or willful misconduct to the detriment of the Company; (ii) Mr. Isaac’s
fraud or embezzlement of funds or property, or misappropriation involving the Company’s assets, business, customers, suppliers,
or employees; (iii) Mr. Isaac’s failure to observe or perform any covenant, condition or provision of this Agreement; (iv) Mr.
Isaac’s willful failure to comply with a lawful directive of the Company’s Board of Directors; (v) Mr. Isaac’s failure
to comply with any of the Company’s written policies and procedures; or (vi) Mr. Isaac’s conviction of, or plea of guilty
or nolo contendere to a felony.
The
Isaac Consulting Agreement also contains standard assignment of inventions, indemnification and confidentiality provisions, subject to
customary exceptions. Further, Mr. Isaac is subject to certain non-solicitation covenants during the term of the agreement and for 12
months thereafter.
Mr.
Isaac is also eligible for discretionary equity bonuses and/or cash awards, from time to time in the discretion of the Compensation Committee
and/or Board of Directors.
Mr.
Isaac’s compensation under the Isaac Consulting Agreement may be increased from time to time, by the Compensation Committee, or
the Board of Directors (with the recommendation of the Compensation Committee), which increases do not require the entry into an amended
Isaac Consulting Agreement.
Eugene
M. Johnston, Chief Financial Officer
On
October 1, 2022, the Company entered into an offer letter with Eugene M. Johnston (the “Offer Letter”). The Offer
Letter provided for Mr. Johnston to serve as the full-time Chief Financial Officer of the Company, reporting to the Company’s Board
of Directors and Chief Executive Officer, for a term of 12 months from October 1, 2022 to September 30, 2023. Pursuant to the Offer Letter,
the Company agreed to grant Mr. Johnston 10,000 shares of the Company’s restricted stock which vested over a 6-month period at
the rate of 1,667 shares per month with the first 1,667 shares vesting on November 1, 2022. Pursuant to the Offer Letter, Mr. Johnston
is eligible to participate in any of the Company’s future sponsored benefit plans, including but not limited to, health insurance
benefits, 401k, stock option or restricted stock grants, and other fringe benefits, once established, and no earlier than the first of
the month following 105 days of Johnston’s start date. Mr. Johnston is also eligible to receive equity incentive grants or cash
bonus awards as determined by the Company’s Board (or a committee of the Board) in their sole discretion from time to time. The
shares were valued at $4.20 per share for a total of $41,763.
On
October 1, 2023, the Company executed a Summary of Terms and Conditions with Mr. Johnston continuing his appointment as the Company’s
Chief Financial Officer on a full-time basis for a term of 12 months, through October 1, 2024. Pursuant to the agreement, the Company
issued Mr. Johnston 3,333 shares of the Company’s common stock and agreed to pay him $2,000 per month. The shares were issued under,
and subject to the terms of, the Company’s 2022 Equity Incentive Plan.
On
November 11, 2024 and effective on October 1, 2024, the Company entered into a Consulting agreement with Mr. Johnston, the Company’s
Chief Financial Officer pursuant to which Mr. Johnston agreed to serve as the Chief Financial Officer of the Company and to provide services
to the Company as reasonably requested during the term of the Consulting Agreement, which is 12 months. As consideration for the services
to be provided by Mr. Johnston under the Consulting Agreement, the Company agreed to pay him (a) $4,000 per month; and (b) to issue him
25,000 shares of Company common stock under the Company’s 2022 Equity Incentive Plan, as amended, which shares vested upon execution
of the Consulting Agreement. Pursuant to the Consulting Agreement, we agreed to reimburse Mr. Johnston’s expenses, subject to pre-approval
for any expense greater than $500. The Consulting Agreement may be terminated prior to the end of the term (i) with the mutual approval
of the parties; (ii) with written notice by the non-breaching party, upon the breach of the agreement by the other party, and the failure
to cure such breach within 30 days; or (iii) by Mr. Johnston, at any time, for any reason.
The
Consulting Agreement also contains standard assignment of inventions, indemnification and confidentiality provisions, subject to customary
exceptions. Further, Mr. Johnston is subject to certain non-solicitation covenants during the term of the agreement and for 12 months
thereafter.
Mr.
Johnston is also eligible for discretionary equity bonuses and/or cash awards, from time to time in the discretion of the Compensation
Committee and/or Board of Directors. Mr. Johnston’s compensation under the Consulting Agreement may be increased from time to time,
by the Compensation Committee, or the Board of Directors (with the recommendation of the Compensation Committee), which increases do
not require the entry into an amended Consulting Agreement.
Amanda
Hammer, Chief Operating Officer
On
and effective on May 1, 2023, we entered into an Employment Agreement with Mrs. Amanda Hammer. The Employment Agreement provides for
Mrs. Hammer to serve as Chief Operating Officer of the Company for an initial three-year term extending through May 1, 2026, provided
that the agreement automatically renews for additional one-year terms thereafter in the event neither party provides the other at least
60 days prior notice of their intention not to renew the terms of the agreement.
The
agreement provides for Mrs. Hammer to receive an annual salary of $150,000 per year (the “Base Salary”). The Employment
Agreement also required the Company to grant Mrs. Hammer a sign-on bonus of (a) 5,000 shares of common stock of the Company, vested in
full upon issuance, and (b) options to purchase an additional 10,000 shares of common stock of the Company, with an exercise price of
the greater of (i) $16.50 per share; and (ii) the closing sales price of the Company’s common stock on the Nasdaq Capital Market
on the date the Employment Agreement and the grant is approved by the Board (which date was May 1, 2023), and which exercise price was
$16.50 per share, with options to purchase 3,333 shares vesting every 12 months that the Employment Agreement is in effect, subject to
the terms of the Company’s 2022 Equity Incentive Plan. The options are exercisable for a period of ten years and are documented
by a separate option agreement entered into by the Company and Mrs. Hammer (the “Option Agreement”).
Pursuant
to the terms of the Employment Agreement, Mrs. Hammer’s annual compensation package includes (1) a Base Salary (described above),
subject to increases from time to time in the determination of the Compensation Committee of the Board (or the Board with the recommendation
of the Compensation Committee), and (2) a discretionary bonus payment to be determined in the sole discretion of the Compensation Committee
or the Board of Directors in the targeted amount of 100% of her Base Salary (the “Cash Bonus”). Mrs. Hammer is also
eligible for discretionary equity bonuses and/or cash awards, from time to time in the discretion of the Compensation Committee and/or
Board of Directors.
Mrs.
Hammer’s compensation under her employment agreement may be increased from time to time, by the Compensation Committee, or the
Board of Directors (with the recommendation of the Compensation Committee), which increases do not require the entry into an amended
employment agreement.
The
Employment Agreement prohibits Mrs. Hammer from competing against us during the term of the agreement and for a period of 12 months after
the termination of the agreement in any state and any other geographic area in which we or our subsidiaries provide Restricted Services
or Restricted Products, directly or indirectly, during the 12 months preceding the date of the termination of the agreement. “Restricted
Products” means any product that the Company or any of its subsidiaries has provided or is developing, manufacturing, distributing,
selling and/or providing at any time during the term of the Agreement, or which she obtained any trade secret or other confidential information
about at any time during the term, or which she became aware of as a result of services rendered under the Employment Agreement. “Restricted
Services” means any services that the Company or any of its subsidiaries has provided or is developing, performing and/or providing
at any time during the term of the agreement, or which she obtained any trade secret or other confidential information about at any time
during the term, or which she became aware of as a result of services rendered under the Employment Agreement. The non-compete requirements
described in the paragraph above, as well as the restriction on Mrs. Hammer to refrain, for a period of 12 months from the termination
date, from soliciting customers of the Company with whom Mrs. Hammer worked during the last year of Mrs. Hammer’s employment with
the Company and from soliciting employees of the Company to leave the employment of the Company, are defined as the “Non-Compete
Provisions”.
We
may terminate Mrs. Hammer’s Employment Agreement (a) for “cause” which means (i) that Mrs. Hammer has materially
breached any obligation, duty, covenant or agreement under the agreement, which breach is not cured or corrected within 30 days of written
notice thereof from the Company (except for breaches of the assignment of inventions or confidentiality/non-solicitation and non-compete
provisions of the agreement, which cannot be cured and for which the Company need not give any opportunity to cure); (ii) Mrs. Hammer
commits any act of misappropriation of funds or embezzlement; (iii) Mrs. Hammer commits any act of fraud; or (iv) Mrs. Hammer is convicted
of, or pleads guilty or nolo contendere with respect to, theft, fraud, a crime involving moral turpitude, or a felony under federal or
applicable state law; (b) in the event Mrs. Hammer suffers a physical or mental disability which renders him unable to perform her duties
and obligations for either 90 consecutive days or 180 days in any 12-month period; (c) for any reason without “cause”;
or (d) upon expiration of the initial term of the agreement (or any renewal) upon notice as provided above. The agreement also automatically
terminates upon the death of Mrs. Hammer.
Mrs.
Hammer may terminate her employment (a) for “good reason” if there is (i) a material diminution in her authority,
duties, or responsibilities; (ii) a material diminution in the authority, duties, or responsibilities or a requirement that Mrs. Hammer
report to an officer or employee of the Company rather than reporting to the Board; (iii) a material breach by the Company of the agreement,
or (iv) a material diminution in Mrs. Hammer’s Base Salary, in each case without her prior written consent; provided, however,
prior to any such termination by Mrs. Hammer for “good reason,” Mrs. Hammer must first advise us in writing (within
30 days of the occurrence of such event) and provide us 30 days to cure (5 days in the event the event results to a reduction in her
salary), after which in the event we do not cure the issue leading to such “good reason” notice, Mrs. Hammer has 30
days to resign for “good reason”); (b) for any reason without “good reason”; and (c) upon expiration
of the initial term of the agreement (or any renewal) upon notice as provided above.
If
Mrs. Hammer’s employment is terminated due to her death or disability, Mrs. Hammer or her estate is entitled to a lump sum cash
severance payment equal to the sum of (i) Mrs. Hammer’s Base Salary accrued through the termination date; (ii) any unpaid Cash
Bonus for the prior year that would have been paid had Mrs. Hammer not been terminated prior to such payment; and (iii) the pro rata
amount of the current year’s targeted bonus, multiplied by the number of days in such year preceding the termination date divided
by 365. Additionally, and notwithstanding anything to the contrary in any equity agreement, any unvested stock options or equity compensation
held by Mrs. Hammer upon such termination shall vest and shall be exercisable until the earlier of (A) ninety days from the date of termination
and (B) the latest date upon which such stock options or equity would have expired by their original terms under any circumstances.
If
Mrs. Hammer’s employment is terminated by Mrs. Hammer without “good reason” or her non-renewal of the agreement,
or by non-renewal by the Company, by the Company with cause or the Company’s non-renewal of the agreement, Mrs. Hammer is entitled
to her Base Salary accrued through the termination date and no other benefits other than continuation of health insurance benefits on
the terms and to the extent required by COBRA, or such other similar law or regulation as may be applicable to Mrs. Hammer or the Company
with respect to Mrs. Hammer. Additionally, any unvested stock options or equity compensation held by Mrs. Hammer shall immediately terminate
and be forfeited (unless otherwise provided in the applicable award) and any previously vested stock options (or if applicable equity
compensation) shall be subject to terms and conditions set forth in the applicable equity agreement, as such may describe the rights
and obligations upon termination of employment of Mrs. Hammer.
If
Mrs. Hammer’s employment is terminated by Mrs. Hammer for “good reason”, or by the Company without “cause”,
(a) Mrs. Hammer is entitled to her Base Salary accrued through the termination date and any unpaid Cash Bonus for the prior completed
calendar year that would have been paid had Mrs. Hammer not been terminated prior to such payment, plus a lump sum cash severance payment
equal to (x) the sum of (i) an amount equal to her current annual Base Salary; plus (ii) an amount equal to her targeted bonus for the
year containing the termination date, multiplied by (y) a fraction, (A) the numerator of which shall equal the Severance Months (defined
below), and (B) the denominator of which is 12 (the “Severance Payment”); and (b) provided Mrs. Hammer elects to receive
continued health insurance coverage through COBRA, the Company will pay Mrs. Hammer’s monthly COBRA contributions for health insurance
coverage, as may be amended from time to time (less an amount equal to the premium contribution paid by active Company employees, if
any) for the Severance Months following the termination date (the “Health Payment”); provided, however, that if at
any time Mrs. Hammer is covered by a substantially similar level of health insurance through subsequent employment or otherwise, the
Company’s health benefit obligations shall immediately cease, and the Company shall have no further obligation to make the Health
Payment. Additionally, and notwithstanding anything to the contrary in any equity agreement, any unvested stock options or equity compensation
previously granted to Mrs. Hammer will vest immediately upon such termination and shall be exercisable by Mrs. Hammer until the earlier
of (A) ninety (90) days from the date of termination and (B) the latest date upon which such stock options or equity would have expired
by their original terms under any circumstances, provided that such provisions shall not affect any equity awards outstanding prior to
the date of the Employment Agreement.
As
a condition to Mrs. Hammer’s right to receive any Severance Payment, (A) Mrs. Hammer must execute and deliver to the Company a
written release in form and substance satisfactory to the Company, of any and all claims against the Company and all directors and officers
of the Company with respect to all matters arising out of Mrs. Hammer’s employment, or the termination thereof (other than claims
for entitlements under the terms of the agreement or plans or programs of the Company in which Mrs. Hammer has accrued a benefit), which
must be effective by the 60th day following her termination date; and (B) Mrs. Hammer must not have breached any of her covenants and
agreements under the Agreement relating to assignment of inventions and confidentiality, including the non-solicitation and non-compete
provisions thereof, which shall continue following the termination date.
“Severance
Months” means (a) three, in the event the period of time between the effective date and the termination date is less
than one year; (b) six, in the event the period of time between the effective date and the termination date is one year or more,
but less than two years; (c) nine, in the event the period of time between the effective date and the termination date is two
years or more, but less than three years; and (d) twelve, in the event the period of time between the effective date and the termination
date is more than three years.
The
Employment Agreement also contains standard assignment of inventions, indemnification and confidentiality provisions. Further, Mrs. Hammer
is subject to non-solicitation covenants during the term of the agreement.
Although
Mrs. Hammer will be prohibited from competing with us while she is employed with us, she will only be prohibited from competing for twelve
months after her employment with us ends pursuant to her employment agreement. Accordingly, Mrs. Hammer could be in a position to use
industry experience gained while working with us to compete with us.
On,
and effective on February 6, 2025, the Company, with the approval of the Board of Directors of the Company, with the recommendation of
the Compensation Committee of the Board of Directors, entered into a First Amendment to Employment Agreement with Amanda Hammer, the
Company’s Chief Operating Officer (the “Hammer Amendment”).
Pursuant
to the Hammer Amendment, Ms. Hammer’s role with the Company was expanded to include serving as Chief Operating Officer of Mango
& Peaches; certain provisions of the employment agreement relating to the Company were amended to include both the Company and Mango
& Peaches; Ms. Hammer’s compensation was increased to $180,000 per year, effective February 1, 2025; and the Company agreed
to pay Ms. Hammer a cash bonus of $15,000 within 30 days of the effective date of the Hammer Amendment.
Jonathan
Arango, Former President and Secretary
On
August 31, 2022, we entered into an Executive Employment Agreement with Jonathan Arango. The agreement, which provides for Mr. Arango
to serve as our President, Chief Operating Officer (which role he ceased serving as in May 2023) and Secretary, was effective September
1, 2022, and has a term extending through September 1, 2025, provided that the agreement automatically extended for additional one-year
terms thereafter in the event neither party provides the other at least 60 days prior notice of their intention not to renew the terms
of the agreement.
Pursuant
to the terms of the agreement, Mr. Arango’s annual compensation package included (1) a base salary of $120,000 per year, subject
to annual increases of $30,000, each year the agreement is in place, and subject to further increases as determined in the sole discretion
of the Compensation Committee or the Board of Directors, and (2) a bonus payment to be determined in the sole discretion of the Compensation
Committee or the Board of Directors in an annual targeted amount of 200% of his base salary, subject to the compliance by Mr. Arango
with performance goals that may be established by the Compensation Committee or the Board of Directors from time to time, provided no
goals have been established to date, and that in the absence of performance goals, the amount of such bonus would be wholly determined
in the discretion of the Compensation Committee or the Board of Directors. Mr. Arango was also paid an automobile allowance of $1,000
per month during the term of the agreement and is eligible to participate in our stock option plan and other benefit plans.
Other
than as discussed above, Mr. Arango’s employment, including, but not limited to required severance and change of control payments,
was identical terms as Mr. Cohen’s agreement discussed above.
Mr.
Arango’s employment agreement terminated automatically upon his resignation from the Company on March 28, 2024.
Although
Mr. Arango was be prohibited from competing with us while he is employed with us, he will only be prohibited from competing for 12 months
after his employment with us ends pursuant to the agreement. Accordingly, Mr. Arango could be in a position to use industry experience
gained while working with us to compete with us.
Compensation
of Directors
The
following table sets forth compensation information with respect to our non-executive directors during our fiscal year ended December
31, 2024. The compensation of our executive directors is included above under “Executive Compensation Table.”
| Name | |
Fees
Earned or Paid in Cash ($)* | | |
Stock
Awards ($)
(1) (2)(3) | | |
All
Other Compensation
($) | | |
Total ($) | |
| Lorraine D’Alessio | |
$ | - | | |
$ | 35,000 | | |
$ | - | | |
$ | 35,000 | |
| Alex P. Hamilton | |
$ | - | | |
$ | 35,000 | | |
$ | - | | |
$ | 35,000 | |
| Dr. Kenny Myers | |
$ | - | | |
$ | 35,000 | | |
$ | - | | |
$ | 35,000 | |
*
The table above does not include the amount of any expense reimbursements paid to the above directors. No directors received any Non-Equity
Incentive Plan Compensation or Nonqualified Deferred Compensation. Does not include perquisites and other personal benefits, or property,
unless the aggregate amount of such compensation is more than $10,000.
| |
(1) |
In
accordance with SEC rules, the amounts included in this column are the grant date fair value for awards granted in the fiscal years
shown, computed in accordance with the stock-based compensation accounting rules that are a part of generally accepted accounting
principles in effect in the United States (as set forth in Financial Accounting Standards Board’s Accounting Standards Codification
Topic 718), but excluding the effect of any estimated forfeitures of such awards. The values in this column reflect the full grant
date fair value of all equity awards granted during the year, although the awards are subject to vesting periods based on continued
employment. |
| |
|
|
| |
(2) |
No
specific board compensation policy has been adopted to date; however, on October 14, 2022, we entered into offer letters with each
of our three independent non-executive directors, Ms. D’Alessio, Mr. Hamilton and Dr. Meyers. Pursuant to the Offer Letters,
each non-executive director agreed to serve as a member of our Board of Directors, and we agreed to grant each non-executive director
5,000 shares of restricted common stock (the “Director Shares”). The Director Shares were issued under the Company’s
2022 Equity Incentive Plan (the “2022 Plan”), with the following vesting schedule: 1/3 of the Director Shares
vested on October 14, 2022, and the remaining Director Shares vest annually in two increments on each of October 14, 2023 (vested)
and 2024, subject to such directors continuing to provide services to the Company on such dates, and subject to the Restricted Stock
Award agreements entered into in order to evidence such grants. The shares were valued at $15.00 per share for a total of $75,000
per director, or $225,000 in aggregate. |
| |
|
|
| |
(3) |
On
June 3, 2024, the Company issued, after recommendation by the Compensation Committee of the Company’s Board of Directors and
approval by the Board of Directors, an aggregate of 20,000 fully vested and earned shares of Company common stock under the Company’s
Amended and Restated Mangoceuticals, Inc. 2022 Equity Plan, in consideration as a bonus to the Company’s independent directors.
The Plan has been registered on Form S-8 Registration Statements previously filed by the Company. Specifically, each of Ms. D’Alessio,
Dr. Myers and Mr. Hamilton received 6,667 shares of the Company’s common stock valued at $5.25 per share. |
No
specific board compensation policy has been adopted to date, however, we expect that our non-executive directors will be granted equity
compensation and paid cash, from time to time, for their services on the Board of Directors.
Key
Man Insurance
The
Company holds key man life insurance in the aggregate
amount of $2,000,000 on the life of Jacob D. Cohen, the Chief Executive Officer of the Company.
2022
Equity Incentive Plan
On
August 31, 2022, the Board of Directors and our majority shareholders adopted the Company’s 2022 Equity Incentive Plan, which was
amended by the First Amendment thereto approved by the Board of Directors on February 26, 2024 and the shareholders on March 25, 2024.
On March 17, 2025, at a Special Meeting of the stockholders of the Company, the stockholders of the Company approved a Second Amendment
to the Mangoceuticals, Inc. 2022 Equity Incentive Plan (“Second Amendment” and the Amended and Restated Mangoceuticals, Inc.
2022 Equity Incentive Plan, as amended by the Second Amendment, the “2022 Plan”). The Second Amendment was originally approved
by the Board of Directors of the Company on February 15, 2025, subject to stockholder approval and the Second Amendment became effective
at the time of stockholder approval.
The
2022 Plan provides an opportunity for any employee, officer, director or consultant of the Company, subject to limitations provided by
federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options;
(iii) stock appreciation rights; (iv) restricted stock awards; (v) restricted stock units; (vi) shares in performance of services; (vii)
other awards of equity or equity based compensation; or (viii) any combination of the foregoing. In making such determinations, the Board
may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s
success, and such other factors as the Board in its discretion shall deem relevant.
Shares
Available Under the 2022 Plan; Evergreen Provision
Subject
to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares of common
stock, or a reorganization or reclassification of the Company’s common stock, the aggregate number of shares of common stock which
may be issued pursuant to awards under the 2022 Plan is the sum of (i) 10,000,000 shares, and (ii) an automatic increase on April 1st
of each year for a period of six years commencing on April 1, 2026 and ending on (and including) April 1, 2032, in an amount equal to
the lesser of (x) ten percent (10%) of the total shares of common stock of the Company outstanding on the last day of the immediately
preceding fiscal year (the “Evergreen Measurement Date”); and (y) 2,000,000 shares of common stock; provided, however, that
the Board may act prior to April 1st of a given year to provide that the increase for such year will be a lesser number of shares of
common stock. This is also known as an “evergreen” provision. Notwithstanding the foregoing, no more than a total of 26,000,000
shares of common stock (or awards) may be issued or granted under the 2022 Plan in aggregate, and no more than 26,000,000 shares of common
stock may be issued pursuant to the exercise of Incentive Stock Options.
If
an award granted under the 2022 Plan entitles a holder to receive or purchase shares of our common stock, then on the date of grant of
the award, the number of shares covered by the award (or to which the award relates) will be counted against the total number of shares
available for granting awards under the 2022 Plan. As a result, the shares available for granting future awards under the 2022 Plan will
be reduced as of the date of grant. However, certain shares that have been counted against the total number of shares authorized under
the 2022 Plan in connection with awards previously granted under such 2022 Plan will again be available for awards under the 2022 Plan
as follows: shares of our common stock covered by an award or to which an award relates which were not issued because the award terminated
or was paid in cash or any portion thereof that was forfeited or cancelled without the delivery of shares will again be available for
awards, including, but not limited to shares forfeited to pay any exercise price or tax obligation.
In
addition, shares of common stock related to awards that expire, are forfeited or cancelled or terminate for any reason without the issuance
of shares shall not be treated as issued pursuant to the 2022 Plan.
The
shares available for awards under the 2022 Plan will be authorized but unissued shares of our common stock or shares acquired in the
open market or otherwise.
Administration
The
Company is the issuer (manager) of the 2022 Plan. The 2022 Plan is administered by either (a) the entire Board of Directors of the Company,
or (b) the Compensation Committee; or (b) as determined from time to time by the Board of Directors (the “Administrator”).
Subject to the terms of the 2022 Plan, the Administrator may determine the recipients, the types of awards to be granted, the number
of shares of our common stock subject to or the cash value of awards, and the terms and conditions of awards granted under the 2022 Plan,
including the period of their exercisability and vesting. The Administrator also has the authority to provide for accelerated exercisability
and vesting of awards. Subject to the limitations set forth below, the Administrator also determines the fair market value applicable
to an award and the exercise or strike price of stock options and stock appreciation rights granted under the 2022 Plan.
The
Administrator may also delegate to one or more executive officers the authority to designate employees who are not executive officers
to be recipients of certain awards and the number of shares of our common stock subject to such awards. Under any such delegation, the
Administrator will specify the total number of shares of our common stock that may be subject to the awards granted by such executive
officer. The executive officer may not grant an award to himself or herself.
On
or after the date of grant of an award under the 2022 Plan, the Administrator may (i) accelerate the date on which any such award becomes
vested, exercisable or transferable, as the case may be, (ii) extend the term of any such award, including, without limitation, extending
the period following a termination of a participant’s employment during which any such award may remain outstanding, or (iii) waive
any conditions to the vesting, exercisability or transferability, as the case may be, of any such award; provided, that the Administrator
shall not have any such authority to the extent that the grant of such authority would cause any tax to become due under Section 409A
of the Internal Revenue Code (the “Code”).
Eligibility
All
of our employees (including our affiliates), non-employee directors and consultants are eligible to participate in the 2022 Plan and
may receive all types of awards other than incentive stock options. Incentive stock options may be granted under the 2022 Plan only to
our employees (including our affiliates).
No
awards are issuable by the Company under the 2022 Plan (a) in connection with services associated with the offer or sale of securities
in a capital-raising transaction; or (b) where the services directly or indirectly promote or maintain a market for the Company’s
securities.
Limit
on Non-Employee Director Compensation
The
maximum number of shares subject to awards granted during a single calendar year to any non-employee director, taken together with any
cash fees paid during the compensation year to the non-employee director, in respect of the director’s service as a member of the
Board during such year (including service as a member or chair of any committees of the Board), will not exceed $500,000, or $1,000,000
in the first year such non-employee director is appointed to the Board, or in the case of any non-employee chairperson of the Board,
in total value (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes).
Compensation will count towards this limit for the fiscal year in which it was granted or earned, and not later when distributed, in
the event it is deferred.
Option
Terms
Stock
options may be granted by the Administrator and may be either non-qualified (non-statutory) stock options or incentive stock options.
The Administrator, in its sole discretion, determines the exercise price of any options granted under the Plan which exercise price is
set forth in the agreement evidencing the option, provided however that at no time can the exercise price be less than the $0.0001 par
value per share of the Company’s common stock. Stock options are subject to the terms and conditions, including vesting conditions,
set by the Administrator (and incentive stock options are subject to further statutory restrictions that will be set forth in the grant
agreement for those options). The exercise price for all stock options granted under the 2022 Plan will be determined by the Administrator,
except that no stock options can be granted with an exercise price that is less than 100% of the fair market value of the Company’s
common stock on the date of grant. Further, shareholders who own greater than 10% of the Company’s voting stock will not be granted
incentive stock options that have an exercise price less than 110% of the fair market value of the Company’s common stock on the
date of grant.
The
term of all stock options granted under the 2022 Plan will be determined by the Administrator, but the term of an incentive stock option
may not exceed 10 years (five years for incentive stock options granted to shareholders who own greater than 10% of the Company’s
voting stock). Each stock option gives the grantee the right to receive a number of shares of the Company’s common stock upon exercise
of the stock option and payment of the exercise price. The exercise price may be paid in cash or if approved by the Administrator, shares
of the Company’s common stock. The Administrator may also permit other ways for a grantee to pay the exercise price.
Options
granted under the 2022 Plan may be exercisable in cumulative increments, or “vest,” as determined by the Administrator.
Incentive
stock options granted under the 2022 Plan are intended to qualify as “incentive stock options” within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. Nonqualified (non-statutory stock options)
granted under the 2022 Plan are not intended to qualify as incentive stock options under the Code.
The
Administrator may impose limitations on the transferability of stock options granted under the 2022 Plan in its discretion. Generally,
a participant may not transfer a stock option granted under the 2022 Plan other than by will or the laws of descent and distribution
or, subject to approval by the Administrator, pursuant to a domestic relations order. However, the Administrator may permit transfer
of a stock option in a manner that is not prohibited by applicable tax and securities laws. Options may not be transferred to a third
party financial institution for value.
Unless
the terms of an optionholder’s stock option agreement, or other written agreement between us and the optionholder, provide otherwise,
if an optionholder’s service relationship with us or any of our affiliates ceases for any reason other than disability, death,
or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service.
This period may be extended in the event that exercise of the option is prohibited by applicable securities laws or the immediate sale
of shares acquired upon exercise of the option is prohibited by our insider trading policy. If an optionholder’s service relationship
with us or any of our affiliates ceases due to death, or an optionholder dies within a certain period following cessation of service,
the optionholder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death. If
an optionholder’s service relationship with us or any of our affiliates ceases due to disability, the optionholder may generally
exercise any vested options for a period of 12 months following the cessation of service. In the event of a termination for cause, options
generally terminate upon the termination date. In no event may an option be exercised beyond the expiration of its term. Acceptable consideration
for the purchase of common stock issued upon the exercise of a stock option will be determined by the administrator and may include (i)
cash, check, bank draft or money order; (ii) a broker-assisted cashless exercise; (iii) the tender of shares of our common stock previously
owned by the optionholder; (iv) a net exercise of the option (to the extent allowed); or (v) other legal consideration approved by the
administrator.
Except
as explicitly provided otherwise in a participant’s stock option agreement or other written agreement with us or one of our affiliates,
the term “cause” is defined in the 2022 Plan to mean any event which would qualify as cause for termination under
the participant’s employment agreement with the Company, or, if there is no such employment agreement, any of the following (i)
the recipient’s dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective
customers, suppliers, vendors or other third parties with which such entity does business; (ii) the recipient’s commission of (A)
a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the recipient’s failure to perform
the recipient’s assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in
the reasonable judgment of the Company, after written notice given to the recipient by the Company; (iv) the recipient’s gross
negligence, willful misconduct or insubordination with respect to the Company or any affiliate of the Company; or (v) the recipient’s
material violation of any provision of any agreement(s) between the recipient and the Company relating to noncompetition, non-solicitation,
nondisclosure and/or assignment of inventions.
Restricted
Stock Unit Awards
Restricted
stock unit (RSU) awards are granted under restricted stock unit award agreements adopted by the administrator. Restricted stock unit
awards may be granted in consideration for any form of legal consideration that may be acceptable to our Board of Directors and permissible
under applicable law. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed
appropriate by the administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally,
dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the
applicable award agreement, or other written agreement between us and the recipient, restricted stock unit awards that have not vested
will be forfeited once the participant’s continuous service ends for any reason.
Restricted
Stock Awards
Restricted
stock awards are granted under restricted stock award agreements adopted by the administrator. A restricted stock award may be awarded
in consideration for cash, check, bank draft or money order, past or future services to us, or any other form of legal consideration
that may be acceptable to our Board of Directors and permissible under applicable law. The administrator determines the terms and conditions
of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ends for any
reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of the date the participant
terminates service with us through a forfeiture condition or a repurchase right.
Stock
Appreciation Rights
Stock
appreciation rights are granted under stock appreciation right agreements adopted by the administrator. The administrator determines
the purchase price or strike price for a stock appreciation right, which generally will not be less than 100% of the fair market value
of our common stock on the date of grant. A stock appreciation right granted under our 2022 Plan will vest at the rate specified in the
stock appreciation right agreement as determined by the administrator. Stock appreciation rights may be settled in cash or shares of
our common stock or in any other form of payment as determined by our Board of Directors and specified in the stock appreciation right
agreement.
The
administrator determines the term of stock appreciation rights granted under our 2022 Plan, up to a maximum of 10 years. If a participant’s
service relationship with us or any of our affiliates ceases for any reason other than cause, disability, or death, the participant may
generally exercise any vested stock appreciation right for a period of three months following the cessation of service. This period may
be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited
by applicable securities laws. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability
or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally
exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death.
In the event of a termination for cause, stock appreciation rights generally terminate upon the termination date. In no event may a stock
appreciation right be exercised beyond the expiration of its term.
Performance
Awards
Our
2022 Plan permits the grant of performance awards that may be settled in stock, cash or other property. Performance awards may be structured
so that the stock or cash will be issued or paid only following the achievement of certain pre-established performance goals during a
designated performance period. Performance awards that are settled in cash or other property are not required to be valued in whole or
in part by reference to, or otherwise based on, our common stock.
The
performance goals may be based on any measure of performance selected by our Board of Directors. The performance goals may be based on
company-wide performance or performance of one or more business units, divisions, affiliates, or business segments, and may be either
absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless
specified otherwise by our Board of Directors at the time the performance award is granted, our Board of Directors will appropriately
make adjustments in the method of calculating the attainment of performance goals as follows: (i) to exclude restructuring and/or other
nonrecurring charges; (ii) to exclude exchange rate effects; (iii) to exclude the effects of changes to generally accepted accounting
principles; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; (v) to exclude the effects of items that
are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting
principles; (vi) to exclude the dilutive effects of acquisitions or joint ventures; (vii) to assume that any business divested by us
achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (viii) to exclude
the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization,
recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions
to common shareholders other than regular cash dividends; (ix) to exclude the effects of stock based compensation and the award of bonuses
under our bonus plans; (x) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be
expensed under generally accepted accounting principles; and (xi) to exclude the goodwill and intangible asset impairment charges that
are required to be recorded under generally accepted accounting principles.
Other
Stock Awards
The
administrator may grant other awards based in whole or in part by reference to our common stock. The administrator will set the number
of shares under the stock award (or cash equivalent) and all other terms and conditions of such awards.
Tax
Withholding Adjustments
To
the extent provided by the terms of an option or other award, or otherwise agreed to by the Administrator, a participant may satisfy
any federal, state or local tax withholding obligation relating to the exercise of such option, or award by a cash payment upon exercise,
or in the discretion of the Administrator, by authorizing our company to withhold a portion of the stock otherwise issuable to the participant,
by delivering already-owned shares of our common stock or by a combination of these means.
Changes
to Capital Structure
In
the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split, or recapitalization,
appropriate adjustments will be made to (i) the class and maximum number of shares reserved for issuance under our 2022 Plan, (ii) the
class and maximum number of shares by which the share reserve may increase automatically each year, (iii) the class and maximum number
of shares that may be issued on the exercise of ISOs, and (iv) the class and number of shares and exercise price, strike price, or purchase
price, if applicable, of all outstanding stock awards.
Corporate
Transactions
In
the event of a corporate transaction (as defined in the 2022 Plan), unless otherwise provided in a participant’s stock award agreement
or other written agreement with us or one of our affiliates or unless otherwise expressly provided by the administrator at the time of
grant, any stock awards outstanding under our 2022 Plan may be assumed, continued or substituted for by any surviving or acquiring corporation
(or its parent company), and any reacquisition or repurchase rights held by us with respect to the stock award may be assigned to the
successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute
for such stock awards, then (i) with respect to any such stock awards that are held by participants whose continuous service has not
terminated prior to the effective time of the corporate transaction, or current participants, the vesting (and exercisability, if applicable)
of such stock awards will be accelerated in full (or, in the case of performance awards with multiple vesting levels depending on the
level of performance, vesting will accelerate at 100% of the target level) to a date prior to the effective time of the corporate transaction
(contingent upon the effectiveness of the corporate transaction), and such stock awards will terminate if not exercised (if applicable)
at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by us with respect to
such stock awards will lapse (contingent upon the effectiveness of the corporate transaction); and (ii) any such stock awards that are
held by persons other than current participants will terminate if not exercised (if applicable) prior to the effective time of the corporate
transaction, except that any reacquisition or repurchase rights held by us with respect to such stock awards will not terminate and may
continue to be exercised notwithstanding the corporate transaction.
In
the event a stock award will terminate if not exercised prior to the effective time of a corporate transaction, the administrator may
provide, in its sole discretion, that the holder of such stock award may not exercise such stock award but instead will receive a payment
equal in value to the excess (if any) of (i) the value of the property the participant would have received upon the exercise of the stock
award, over (ii) any per share exercise price payable by such holder, if applicable. In addition, any escrow, holdback, earn out or similar
provisions in the definitive agreement for the corporate transaction may apply to such payment to the same extent and in the same manner
as such provisions apply to the holders of our common stock.
Change
in Control
Stock
awards granted under our 2022 Plan may be subject to acceleration of vesting and exercisability upon or after a change in control (as
defined in the 2022 Plan) as may be provided in the applicable stock award agreement or in any other written agreement between us or
any affiliate and the participant, but in the absence of such provision, no such acceleration will automatically occur.
Repricing;
Cancellation and Re-Grant of Stock Options or Stock Appreciation Rights
The
Administrator has the right to effect, at any time and from time to time, subject to the consent of any participant whose award is materially
impaired by such action, (1) the reduction of the exercise price (or strike price) of any outstanding option or SAR; (2) the cancellation
of any outstanding option or SAR and the grant in substitution therefor of (A) a new option, SAR, restricted stock award, RSU award or
other award, under the 2022 Plan or another equity plan of the Company, covering the same or a different number of shares of common stock,
(B) cash and/or (C) other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing
under generally accepted accounting principles.
Duration;
Termination of the 2022 Plan
Our
Board of Directors has the authority to amend, suspend, or terminate our 2022 Plan at any time, provided that such action does not materially
impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require
the approval of our shareholders. No incentive stock options may be granted after the tenth anniversary of the date our Board of Directors
adopted our 2022 Plan. No stock awards may be granted under our 2022 Plan while it is suspended or after it is terminated.
Current
Available Shares
As
of May 27, 2025, an aggregate of 7,875,111 shares are available for awards under the 2022 Plan.
Certain
Relationships and Related Party Transactions
Except
as discussed below or otherwise disclosed under “Executive Compensation”, which information is incorporated by reference
where applicable in this “Certain Relationships and Related Transactions, and Director Independence” section, the
following sets forth a summary of all transactions since January 1, 2023, or any currently proposed transaction, in which the Company
was to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of the Company’s
total assets at December 31, 2024 or 2023, and in which any officer, director, or any stockholder owning greater than five percent (5%)
of our outstanding voting shares, nor any member of the above referenced individual’s immediate family, had or will have a direct
or indirect material interest (other than compensation and related agreements described above under “Executive Compensation”).
We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described
below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.
Related
Party Transactions
Issuances
and Sales of Securities
On
May 1, 2023, the Company issued Amanda Hammer, the Chief Operating Officer (COO) of the Company, 5,000 shares of commons tock under the
2022 Plan as a sign-on bonus and granted 10,000 options to purchase shares of common stock of the Company, under the 2022 Plan to Ms.
Hammer, related to her employment agreement. The options have an exercise price of $16.50 per share, an original life of five years and
vest at the annual renewal of their employment over three years.
On
October 1, 2023, the Company executed a Summary of Terms and Conditions (“Consulting Agreement”) with Eugene M. Johnston
continuing his appointment as the Company’s Chief Financial Officer on a full-time basis for a term of 12 months. Pursuant to the
Consulting Agreement, the Company issued Mr. Johnston 3,333 shares of the Company’s common stock and agreed to pay $2,000 per month.
The Consulting Shares were issued under, and subject to the terms of, the Company’s 2022 Equity Incentive Plan.
Effective
December 28, 2023, the Board of Directors, with the recommendation of the Compensation Committee of the Board of Directors, approved
the grant of stock options to purchase 83,333 shares of the Company’s common stock to Jacob D. Cohen, the Company’s Chief
Executive Officer and Chairman, in consideration for services rendered to the Company. The options were granted under the Company’s
2022 Equity Incentive Plan, and the options had a term of five years, subject in all cases to the terms and conditions of the 2022 Plan,
the award agreement entered into to evidence such grant, and Mr. Cohen’s continued service with the Company. The options vested
in full upon grant. The options have an exercise price of $4.80 per share, 110% of the closing sales price of the Company’s common
stock on the NASDAQ Capital market on December 28, 2023, the date the grant was approved.
Effective
on June 3, 2024, the Company issued, after recommendation by the Compensation Committee of the Company’s Board of Directors and
approval by the Board of Directors, an aggregate of 83,333 fully-vested and earned shares of Company common stock under the Company’s
Amended and Restated Mangoceuticals, Inc. 2022 Equity Plan, in consideration as a bonus for 2024 (Mr. Cohen) and services rendered during
2024 (each other recipient), to certain officers, an employee and the Company’s directors. Included as part of the issuances was
the issuance of the following shares of common stock to officers and directors of the Company:
| Recipient |
|
Position With Company |
|
Shares |
| Jacob
D. Cohen |
|
Chief
Executive Officer and Chairman |
|
53,333 |
| Amanda
Hammer |
|
Chief
Operating Officer |
|
6,667 |
| Kenny
Myers |
|
Director |
|
6,667 |
| Alex
Hamilton |
|
Director |
|
6,667 |
| Lorraine
D’Alessio |
|
Director |
|
6,667 |
On
November 11, 2024, we issued Eugene M. Johnston, our Chief Financial Officer, 25,000 shares of common stock under the Company’s
Amended and Restated Mangoceuticals, Inc. 2022 Equity Plan as additional consideration to Mr. Johnston for services provided as Chief
Financial Officer.
Effective
on April 10, 2025, the Company issued, after recommendation by the Compensation Committee of the Company’s Board of Directors and
approval by the Board of Directors, an aggregate of 335,000 fully-vested and earned shares of Company common stock under the Company’s
Second Amended and Restated Mangoceuticals, Inc. 2022 Equity Plan (the “Plan”), as a discretionary bonus for consideration
for services rendered during 2025, to certain of the Company’s officers and directors, as illustrated below.
| Recipient |
|
Position With Company |
|
Shares |
| Jacob
D. Cohen |
|
Chief
Executive Officer and Chairman |
|
200,000 |
| Antonios
Isaac |
|
Director |
|
60,000 |
| Kenny
Myers |
|
Director |
|
25,000 |
| Alex
Hamilton |
|
Director |
|
25,000 |
| Lorraine
D’Alessio |
|
Director |
|
25,000 |
Related
Party Agreements
Epiq
Scripts
On
September 1, 2022, and effective on August 30, 2022, we entered into a Master Services Agreement with Epiq Scripts, LLC, then 51% owned
and controlled by Jacob D. Cohen, our Chairman and Chief Executive Officer. Pursuant to the Master Services Agreement and a related statement
of work, Epiq Scripts agreed to provide for the online fulfillment, specialty compounding, packaging, shipping, dispensing and distribution
of products sold exclusively via our website that may be prescribed as part of a telehealth consultation on our platform. Epiq Scripts
also agreed to provide mail service pharmacy services to us on an exclusive basis during the term of the SOW. The Master Services Agreement
and SOW are described in greater detail above under “Business-Material Agreements-Master Services Agreement with Epiq Scripts”.
We
paid Epiq Scripts a total of $60,000 upon our entry into the Master Services Agreement, comprising $45,000 as a one-time non-refundable
technology systems setup and implementation fee and $15,000 as an upfront retainer to be credited towards the future provision of pharmacy
and related services as outlined and detailed in the Master Services Agreement and SOW. All costs related to the pharmacy services provided
by Epiq Scripts are listed as related party costs of revenues on our statement of operations.
On
January 24, 2023, we entered into Consulting Agreements with four consultants to the Company: (1) Sultan Haroon; (2) John Helfrich; (3)
Justin Baker; and (4) Maja Matthews, each of whom is also an employee of Epiq Scripts. Pursuant to the Consulting Agreements, the Consultants
agreed to provide us services related to the research, development, packaging and marketing for additional pharmaceutical and other over-the-counter
related products during the term of the agreement, which each have a term of 18 months unless otherwise earlier terminated due to breach
of the agreement by either party and the failure to cure such breach 30 days after written notice thereof. In consideration for agreeing
to provide the services under the agreement, the Company issued an aggregate of 23,332 shares of common stock to the consultants as follows:
(1) Sultan Haroon 10,000 shares of restricted common stock; (2) John Helfrich 1,667 shares of restricted common stock; (3) Justin Baker
1,667 shares of restricted common stock; and (4) Maja Matthews 10,000 shares of restricted common stock. The shares issued to Haroon
and Matthews vest at the rate of 3,333 shares upon entry into the agreement, 3,333 shares upon the Company’s successful launch
of a new product category, and 3,334 shares upon the Company’s successful launch of a second and additional new product category,
in each case prior to the 18-month anniversary of the applicable agreement, all of which shares have vested to date The shares issued
to Helfrich and Baker vest at the rate of 667 shares upon entry into the agreement, 500 shares upon the Company’s successful launch
of a new product category, and 500 shares upon the Company’s successful launch of a second and additional new product category,
in each case prior to the 18-month anniversary of the applicable agreement. Any shares not vested by the eighteen-month anniversary of
the applicable agreement are forfeited. The agreement contains customary confidentiality and non-solicitation provisions. The shares
were valued at $15.00 per share for a total of $350,000.
On
February 15, 2023, the 51% of Epiq Scripts then owned by American International was transferred to Mr. Cohen as part of an exchange transaction,
whereby Mr. Cohen agreed to cancel his preferred stock of American International, which provided him voting control over American International,
in exchange for among other assets, American International’s ownership of Epiq Scripts. As a result, Epiq Scripts is currently
51% owned by Mr. Cohen, our Chairman and Chief Executive Officer. Mr. Cohen has served as the co-Manager of Epiq Scripts since January
2022.
On
September 15, 2023, we entered into a Consulting Agreement with Epiq Scripts. Pursuant to the Consulting Agreement, Epiq Scripts agreed
to provide pharmacy consulting services in connection with the Company’s global expansion efforts, and as reasonably requested
by the Company, during the term of the agreement, which is for five years, unless otherwise earlier terminated (a) due to breach of the
agreement by either party and the failure to cure such breach 30 days after written notice thereof; (b) the mutual agreement of the parties;
or (c) the date that Epiq Scripts provides the Company written notice of termination, which may be at any time and for any reason.
In
consideration for agreeing to provide the services under the agreement, the Company agreed to pay Epiq Scripts (1) a one-time payment
of $65,000, payable within ten days of the entry into the agreement, which was timely paid; and (2) a set fee, payable for each prescription
drug pill sold by the Company for cash, to the extent such pill must be prescribed by a medical doctor, or sold through retail pharmacies
over the counter, in jurisdictions where a doctor’s prescription is not required for the sale of such drugs, and sold in a Territory
(defined below), which consideration per pill decreases each year that the agreement is in effect, and is only payable for the first
five years of the agreement.
The
Consulting Agreement further provides that no payments are due for the sale of any prescription pills until the First Sale.
Future
payments are also required to be offset equitably for any prescription pill sold which is later refunded, charged back, returned, or
reimbursed to a purchaser.
The
agreement includes customary representations of the parties, confidentiality and non-solicitation provisions, rights of Epiq Scripts
to audit the sales of prescription pills, subject to certain limitations and requirements, and the requirement that the Company reimburse
certain expenses of Epiq Scripts, subject to certain limitations and pre-approvals.
On
September 15, 2023, we entered into a First Addendum to Master Services Agreement with Epiq Scripts. Pursuant to the First Amendment,
the parties agreed to amend the MSA to include certain Right of first negotiation rights and right of first refusal rights (each as discussed
below). Additionally, the First Amendment provides for certain rights to Epiq Scripts in the event that the Company seeks to obtain pharmaceutical
services in connection with certain Company products in jurisdictions other than the United States, including, without limitation, Mexico
and the United Kingdom, where Epiq Scripts does not currently maintain licenses or permits and/or to terminate Epiq Scripts’ rights
to provide exclusive Pharmaceutical Services in any current state of the United States or Future Jurisdiction where Epiq Scripts may
then be providing Pharmaceutical Services to the Company.
Specifically,
the parties agreed in the First Amendment that should the Company decide to transfer any services provided by Epiq Scripts in a Current
Jurisdiction to another pharmaceutical service provider, the Company will be required to pay Epiq Scripts a fee of 1% of the total gross
sales of all Prescription Products (defined below) by the Company resulting from the Transferred Services in the Current Jurisdiction,
for a period of the lesser of (a) five (5) years from the date the Company transferred the Transferred Services; and (b) through the
end of the term of the MSA (including where applicable, any renewal term)(the “Non-Use Fee”). The Non-Use Fee is payable
monthly in arrears, for calendar quarters, by the 15th day following the end of each calendar quarter.
Notwithstanding
the above, the Non-Use Fee shall not apply, and the Company shall not be obligated to pay any Non-Use Fee (a) in the event that the Transferred
Services are provided directly by the Company or a majority-owned subsidiary of the Company; (b) in the event the Company decides to
enter into an agreement with another pharmaceutical service provider to provide Pharmaceutical Services in a Future Jurisdiction; or
(c) in connection with any services provided by any parties in any Future Jurisdictions.
The
First Amendment also provides that until the fifth anniversary of the First Amendment, the Company shall notify Epiq Scripts in writing
of any plans to (a) expand its need for pharmacy services outside of those contemplated by the MSA; (b) expand its need for pharmacy
services into a new jurisdiction which Epiq Scripts does not then operate in (including, but not limited to new countries); or (c) begin
providing pharmacy services internally (either through organic growth or acquisition). Thereafter Epiq Scripts has the right to provide
the Company written notice of its intention to provide such services (as described in (a) or (b) above, whereafter the Company is required
to discuss and negotiate such services in good faith with Epiq Scripts for a period of not less than 15 days). Otherwise, in the event
of the occurrence of an event discussed in (c) above, the Company is required to discuss the possibility of Epiq Scripts either co-operating
the pharmacy or providing management services to the Company in good faith for 15 days. In the event after such 15 day period, the Company
and Epiq Scripts cannot come to a mutually agreeable agreement, the Company is under no further obligation regarding the matter set forth
in the notice provided to Epiq Scripts.
Finally,
the First Amendment includes a requirement whereby if Epiq Scripts receives notice of any proposed fundamental transaction involving
Epiq Scripts or its assets, including any agreement, arrangement, offer or proposal (including a letter of intent, term sheet, form of
definitive agreement or definitive agreement) for an asset sale or acquisition, merger, acquisition or sale of securities, or redemption
or repurchase of securities, Epiq Scripts must provide the Company notice of such offer within three days, after which receipt the Company
will have the right of first refusal for 30 days to become the purchaser in connection with the notified transaction, on the terms, and
subject to the conditions, set forth in such notified offer and pursuant to the conditions of the First Amendment.
On
January 30, 2025, the Company, with the approval of the disinterested members of the Board of Directors and the Company’s Audit
Committee, made up of independent members of the Board of Directors, entered into two Assignment, Assumption and Novation Agreements
with Epiq Scripts, LLC, which is 51% owned by Jacob Cohen, the Company’s Chief Executive Officer and Chairman, and the Chief Executive
Officer and sole director of Mango & Peaches Corp., the Company’s current wholly-owned subsidiary (provided that the Company
has agreed to issue Mr. Cohen (a) 1,700,000 shares of the common stock of Mango & Peaches (representing 25.4% of Mango & Peaches’s
outstanding shares of common stock); and (b) 100 shares of Series A Super Majority Voting Preferred Stock of Mango & Peaches, which
will have the right to vote fifty-one percent (51%) of the total vote on all Mango & Peaches shareholder matters).
Pursuant
to the Epiq Scripts Assignments, the Company assigned all of its rights under (1) a September 1, 2022, Master Services Agreement, as
amended with Epiq Scripts; and (2) a September 15, 2023, Consulting Agreement with Epiq Scripts, to Mango & Peaches, Mango &
Peaches agreed to take responsibility for all obligations thereunder, effective as of the assignment date, and Epiq Scripts agreed to
novate the responsibility of the Company thereunder, effective as of the assignment date. Additionally, we agreed to indemnify Mango
& Peaches for any liability under such agreements prior to the assignment date and Mango & Peaches agreed to indemnify us against
any liability under such agreements after the assignment date.
During
the years ended December 31, 2024 and 2023, the Company acquired computers and office equipment totaling $0 and $3,519, respectively.
Depreciation for the years ended December 31, 2024 and 2023 was $2,256 and $28,752, respectively. On May 15, 2024, the Company disposed
of $119,819 of equipment to Epiq Scripts. The equipment was sold for $65,000, realizing a loss on sale of assets of $18,387.
Consulting
Agreements with PHX
On
September 6, 2022, we entered into a Consulting Agreement with PHX Global, LLC (“PHX”), which is owned by Peter “Casey”
Jensen, who was a member of the Board of Directors of American International. Pursuant to the Consulting Agreement, PHX agreed to provide
consulting and general business advisory services as reasonably requested by the Company during the term of the agreement, which was
for 12 months, unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach
30 days after written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued PHX
3,333 shares of restricted common stock.
On
November 7, 2023, we renewed the Consulting Agreement with PHX. Pursuant to the Consulting Agreement, PHX agreed to provide consulting
and general business advisory services as reasonably requested by the Company during the term of the agreement, which was for 12 months,
unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach 30 days after
written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued PHX 13,333 shares
of restricted common stock. The agreement contains customary confidentiality and non-solicitation provisions. The shares were valued
at $7.05 per share for a total of $94,000.
On
April 25, 2024, the Company amended its Consulting Agreement with PHX dated November 7, 2023 whereby the Company agreed to issue PHX
an additional 13,333 shares of restricted common stock. The additional 13,333 shares were issued under, and subject to the terms of,
the Company’s 2022 Equity Incentive Plan. The shares were valued at $4.20 per share for a total of $56,000.
On
September 27, 2024, we extended a Consulting Agreement with PHX. Pursuant to the Consulting Agreement, PHX agreed to provide consulting
and general business advisory services as reasonably requested by the Company during the term of the agreement, which was for six months,
unless otherwise earlier terminated due to breach of the agreement by either party, and the failure to cure such breach 30 days after
written notice thereof. In consideration for agreeing to provide the services under the agreement, the Company issued PHX 13,333 shares
of restricted common stock. The agreement contains customary confidentiality and non-solicitation provisions. The shares were valued
at $3.60 per share for a total of $48,000.
Greentree
Service Agreements
On
September 1, 2023, we entered into a service agreement with Greentree Financial Group, Inc. (“Greentree”). Pursuant
to the Service Agreement, Greentree agreed to perform the following services: (a) bookkeeping services for the Company for the period
from October 1, 2023 through September 30, 2024; (b) advice and assistance to the Company in connection with the conversion of its financial
reporting systems, including its projected financial statements, to a format that is consistent with US GAAP; (c) assistance to the Company
with compliance filings for the quarters ended September 30, 2023, March 31, 2024, June 30, 2024 and the year ended December 31, 2023,
including the structure and entries as well as assistance with US GAAP footnotes; (d) reviewing, and providing advice to the Company
on, all documents and accounting systems relating to its finances and transactions, with the purpose of bringing such documents and systems
into compliance with US GAAP or disclosures required by the SEC; and (e) providing necessary consulting services and support as a liaison
for the Company to third party service providers, including coordination amongst the Company and its attorneys, CPAs and transfer agent.
Since February 2015, Mr. Eugene (Gene) M. Johnston, our Chief Financial Officer (who was appointed October 1, 2022) has served as an
Audit Manager for Greentree.
The
Company agreed to issue Greentree 5,000 shares of the Company’s restricted common stock upon the parties’ entry into the
agreement, and to pay Greentree $40,000 in cash, payable as follows: (a) $20,000 on or before September 30, 2023; (b) $20,000 on or before
March 31, 2024. We also agreed to reimburse Greentree for its reasonable out-of-pocket expenses incurred in connection with Greentree’s
activities under the agreement, including the reasonable fees and travel expenses for the meetings on behalf of the Company. The Service
Agreement includes customary indemnification obligations requiring the Company to indemnify Greentree and its affiliates with regard
to certain matters. The shares were valued at $16.95 per share for a total of $84,750.
On
December 2, 2024, the Company entered into another service agreement with Greentree. The Company and Greentree were previously party
to a service agreement which expired pursuant to its terms on September 30, 2024. Since February 2015, Mr. Eugene M. Johnston, our Chief
Financial Officer (who was appointed October 1, 2022), has served as Audit Manager for Greentree.
Pursuant
to the Service Agreement, Greentree agreed to perform the following services: (a) assistance to the Company with compliance filings for
the quarters ended March 31, 2025, June 30, 2025, September 30, 2025, and the year ended December 31, 2024, including the consolidation
structure and entries as well as assistance with United States Generally Accepted Accounting Principles (“US GAAP”)
footnotes; (b) reviewing, and providing advice to the Company on, all documents and accounting systems relating to its finances and transactions,
with the purpose of bringing such documents and systems into compliance with US GAAP or disclosures required by the Securities and Exchange
Commission (the “SEC”); (c) providing necessary consulting services and support as a liaison for the Company to third
party service providers, including coordination amongst the Company and its attorneys, certified public accountants and transfer agent;
and (d) preparing and filing the Company’s tax returns with the Internal Revenue Service for the 2024 tax year.
The
Company agreed to issue Greentree 40,000 shares of the Company’s restricted common stock upon the parties’ entry into the
agreement (fully-earned upon issuance), and to pay Greentree $40,000 in cash, payable as follows: (a) $20,000 on or before December 31,
2024; and (b) $20,000 on or before March 31, 2025. We also agreed to reimburse Greentree for its reasonable out-of-pocket expenses incurred
in connection with Greentree’s activities under the agreement, including the reasonable fees and travel expenses for the meetings
on behalf of the Company.
The
Service Agreement continues in effect through October 15, 2025, but may be terminated earlier with 45 days’ notice from the Company
to Greentree, provided that in the event the Company terminates the agreement prior to the end of the Term, the entire cash fee due during
the term of the Service Agreement is immediately due and payable.
The
Service Agreement includes customary indemnification obligations requiring the Company to indemnify Greentree and its affiliates with
regard to certain matters.
Mango
& Peaches Agreements
On
December 13, 2024, the Company, entered into a Parent Subsidiary Contribution Agreement with Mango & Peaches, a then recently formed
wholly-owned subsidiary of the Company. Pursuant to the Contribution Agreement, the Company contributed substantially all of its assets,
including ownership of: (a) its 98% ownership of MangoRx Mexico S.A. de C.V., a Mexican Stock Company; and (b) its 100% ownership of
MangoRx UK Limited, a company incorporated under the laws of the United Kingdom, to Mango & Peaches, in order to restructure the
ownership and operations of the Company, better segregate such operations and liabilities and provided for the issuance of a portion
of the capital of Mango & Peaches to Mr. Jacob Cohen, the Chief Executive Officer of the Company, as additional consideration to
Mr. Cohen, as discussed in greater detail below under “Executive Compensation”-”Employment and Consulting
Agreements”- “Jacob D. Cohen, Chief Executive Officer”, pursuant to which the Company agreed to issue Mr.
Cohen (a) 1,700,000 shares of the common stock of Mango & Peaches (representing 25.4% of Mango and Peaches’ then outstanding
shares of common stock); and (b) 100 shares Series A Super Majority Voting Preferred Stock of Mango & Peaches, discussed in greater
detail below, which issuances are subject to shareholder approval, which shareholder approval the Company expects to solicit from shareholders
in the near future.
In
consideration for the transfer of the assets, the Company received 4,999,999 shares of Mango & Peaches’ common stock, bringing
its ownership to 5,000,000 shares of common stock of Mango & Peaches upon the closing of the Contribution Agreement.
Pursuant
to the Contribution Agreement, Mango & Peaches assumed all of the liabilities of the Company relating to the Contributed Assets contributed,
but none of the other liabilities of the Company and the Company agreed to indemnify Mango & Peaches against any damages relating
to a breach of any representation or warranty of the Company in the Contribution Agreement, or any claim relating to the Contributed
Assets, before the Contribution Effective Date; and Mango & Peaches agreed to indemnify the Company against any damages relating
to a breach of any representation or warranty of Mango & Peaches in the Contribution Agreement, or any claim relating to the Contributed
Assets, after the Contribution Effective Date. The Contribution Agreement and the contribution and assumption provided for therein was
effective December 15, 2024.
On
January 9, 2025, Mango & Peaches filed a Certificate of Designations of Mango & Peaches Corp., establishing the designations,
preferences, limitations, and relative rights of its Series A Super Majority Voting Preferred Stock, with the Secretary of State of Texas,
which was filed by the Texas Secretary of State on January 15, 2025, effective January 9, 2025.
It
is anticipated that the 100 designated shares of Series A Preferred Stock of Mango & Peaches will be issued to Jacob Cohen, the Chief
Executive Officer of the Company, pursuant to the terms of his Amended and Restated Executive Employment Agreement with the Company as
discussed above under “Executive Compensation”-”Employment and Consulting Agreements”- “Jacob
D. Cohen, Chief Executive Officer”.
On
April 24, 2025, we entered into a First Amendment to Amended and Restated Executive Employment Agreement with Jacob D. Cohen, our Chief
Executive Officer (the “Amendment”).
The
Amendment, which has an effective date of April 1, 2025, amended that prior Amended and Restated Executive Employment Agreement dated
December 13, 2024, by and between the Company and Mr. Cohen, as amended to date (the “A&R Agreement”) to: (a)
provide for Mr. Cohen to be paid a bonus of an additional 3,192,906 shares of Mango & Peaches Corp. (“M&P”),
a subsidiary of the Company, common stock (the “M&P Stock”); (b) increase Mr. Cohen’s base yearly compensation
to $420,000 per year (from $360,000 per year); (c) increase the monthly office allowance payable to Mr. Cohen to $10,000 (from $7,500);
and (d) increase the monthly car allowance payable to Mr. Cohen to $5,000 per month (from $2,500).
Following
the issuance of the M&P Stock and the 1,700,000 shares of M&P common stock which Mr. Cohen is due pursuant to the term of the
A&R Agreement, which haven’t been issued to date, Mr. Cohen will own 49% of the outstanding common stock of M&P. Mr. Cohen
is also due to be issued 100 shares of Series A Super Majority Voting Preferred Stock of M&P (described in greater detail in the
Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on January 15, 2025), which have the right
to vote fifty-one percent (51%) of the total vote on all M&P shareholder matters, voting separately as a class, which when issued
will give Mr. Cohen voting control over M&P.
LT
Global Agreement
On
January 28, 2025, the Company, with the approval of the disinterested members of the Board of Directors and the Company’s Audit
Committee, made up of independent members of the Board of Directors, entered into an LT Global Practice Management Service Agreement
(the “LT Service Agreement”) with LT Global Practice Management (“LT Global”), which entity is
owned by the wife of Mr. Jacob Cohen, the Company’s Chief Executive Officer and Chairman. Pursuant to the agreement, LT Global
agreed to provide us virtual professionals at the rate of between $1,800 to $3,500 on a full-time basis per virtual professional. The
agreement has a term beginning on January 15, 2025, and continuing until either party provides the other at least 30 days prior written
notice. The agreement includes customary confidentiality requirements of the parties, indemnification requirements, and other provisions.
Related
Party Loans and Advances
On
December 10, 2021 and March 18, 2022, the Company received advances of $39,200 and $50,000, respectively, for a total of $89,200 from
its previous majority shareholder, American International, in order to cover various general and administrative expenses. The amount
owed to American International was $39,200 as of December 31, 2021. Imputed interest equal to 8% per annum, or $181, was recorded against
the related party advance as of December 31, 2021. Other than the imputed interest discussed above, the advances bear no interest and
are due on demand upon the Company’s ability to repay the advances from either future revenues or investment proceeds. Pursuant
to the terms of the June 16, 2022, Securities Purchase Agreement discussed above, on June 16, 2022, Cohen Enterprises also acquired the
right to be repaid the $89,200 advanced from American International to the Company. As of December 31, 2022, the total unpaid amount
of the advance totaled $89,200 and as of December 31, 2024 and 2023, the amount had been repaid in full.
On
June 29, 2022, the Company received an advance of $25,000 from Cohen Enterprises in order to cover various general and administrative
expenses. The Company repaid Cohen Enterprises $25,000 on August 18, 2022, bringing the total amount owed to Cohen Enterprises to $89,200
as of December 31, 2022. The Company paid Cohen Enterprises $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.
On
March 1, 2024, the Company borrowed $37,500 from Ronin Equity Partners, which is owned and controlled by Jacob D. Cohen, the Company’s
Chief Executive Officer and Chairman. The amount borrowed is payable on demand and does not accrue interest.
On
March 18, 2024, the Company borrowed $50,000 from Cohen Enterprises, Inc., which is owned and controlled by Jacob D. Cohen, the Company’s
Chief Executive Officer and Chairman. The amount borrowed is payable on demand and does not accrue interest.
On
April 1, 2024, the Company borrowed $100,000 from Cohen Enterprises, Inc., which is owned and controlled by Jacob D. Cohen, the Company’s
Chief Executive Officer and Chairman. The amount borrowed is payable on demand and does not accrue interest.
On
October 7, 2024, the Company repaid $37,500 that was borrowed from Ronin Equity Partners, 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 did not accrue interest.
On
October 18, 2024, the Company entered into a $150,000 promissory note (the “Cohen Note”) with Cohen Enterprises, Inc.
to evidence, document and memorialize (a) $50,000 loaned to the Company from Cohen Enterprises on March 18, 2024, and (b) $100,000 loaned
to the Company from Cohen Enterprises on April 1, 2024, which amounts previously accrued no interest and were due on demand. The Cohen
Note in the principal amount of $150,000, accrues interest at the rate of 8% per annum (12% upon the occurrence of an event of default),
with interest accruing monthly in arrears and payable at maturity or earlier acceleration. The Cohen Note is due upon the earlier of
January 2, 2025, and upon acceleration by Cohen Enterprises pursuant to the terms thereof upon default, or automatically upon certain
bankruptcy events occurring. The Cohen Note may be prepaid without penalty, is unsecured and contains customary representations and covenants
of the Company. The note includes customary events of default, and allows Cohen Enterprises the right to accelerate the amount due under
the note upon the occurrence of such event of default, subject to certain cure rights.
On
December 13, 2024, Cohen Enterprises entered into a Note Purchase Agreement with Mill End Capital Ltd. Pursuant to the Note Purchase,
Mill End purchased all of Cohen Enterprises rights under the Cohen Note, issued by the Company as borrower, to Cohen Enterprises, as
lender, in the original amount of $150,000, in consideration for $150,000. The terms of the note remain unchanged, however, the note
is no longer considered a related party note.
On
January 15, 2025, the Company entered into a Debt Conversion Agreement with Mill End. Pursuant to the Debt Conversion Agreement, the
Company and Mill End agreed to convert the entire $150,000 owed by the Company under the Promissory Note, into an aggregate of 100,000
shares of restricted common stock of the Company, based on an agreed conversion price of $1.50 per share.
Pursuant
to the Debt Conversion Agreement, which included customary representations and warranties of the parties, Mill End agreed that the shares
of common stock issuable in connection therewith were in full and complete satisfaction of amounts owed under the Converted Note.
The
Company’s Chairman and Chief Executive Officer, Jacob D. Cohen, has made his personal credit card available for purchases on behalf
of the Company to cover various general and administrative expenses. Mr. Cohen has been repaid a total of $1,153,674 as of May 27,
2025 for Company purchases made on his personal credit card.
On
May 2, 2025, the Company borrowed $100,000 from The Tiger Cub Trust, which trust is controlled by the Company’s Chief Executive
Officer and Chairman, Jacob D. Cohen (“Tiger Cub”), and entered into a Promissory Note with Tiger Cub to evidence
such loan. The Promissory Note has a principal balance of $100,000. The Promissory Note bears interest at a rate of 18% per annum, compounded
monthly, and matures on the earliest of (i) May 2, 2026, (ii) acceleration upon an event of default at the option of the holder, or (iii)
five business days following the closing of a qualified financing.
Review,
Approval and Ratification of Related Party Transactions
Our
Audit Committee is tasked with reviewing related party transactions to determine whether such transactions are fair to the Company and
its shareholders. The Audit Committee of the Board of Directors of the Company will also review and approve any issues relating to conflicts
of interests and all related party transactions of the Company (“Related Party Transactions”). The Audit Committee,
in undertaking such review and will analyze the following factors, in addition to any other factors the Audit Committee deems appropriate,
in determining whether to approve a Related Party Transaction: (1) the fairness of the terms for the Company (including fairness from
a financial point of view); (2) the materiality of the transaction; (3) bids / terms for such transaction from unrelated parties; (4)
the structure of the transaction; (5) the policies, rules and regulations of the U.S. federal and state securities laws; (6) the policies
of the Committee; and (7) interests of each related party in the transaction.
The
Audit Committee will only approve a Related Party Transaction if the Audit Committee determines that the terms of the Related Party Transaction
are beneficial and fair (including fair from a financial point of view) to the Company and are lawful under the laws of the United States.
In the event multiple members of the Audit Committee are deemed a related party, the Related Party Transaction will be considered by
the disinterested members of the Board of Directors in place of the Committee.
In
addition, our Code of Business Conduct and Ethics (described above under “Management-Code of Ethics”), which is applicable
to all of our employees, officers and directors, requires that all employees, officers and directors avoid any conflict, or the appearance
of a conflict, between an individual’s personal interests and our interests.
Director
Independence
Our
common stock is currently quoted on the Nasdaq Capital Market. Nasdaq requires that a majority of our Board of Directors be independent.
Our Board of Directors has determined that each of Lorraine D’Alessio , Alex P. Hamilton and Dr. Kenny Myers is an independent
director as defined under the Nasdaq rules governing members of boards of directors and as defined under Rule 10A-3 of the Exchange Act.
In
assessing director independence, the Board considers, among other matters, the nature and extent of any business relationships, including
transactions conducted, between the Company and each director and between the Company and any organization for which one of our directors
is a director or executive officer or with which one of our directors is otherwise affiliated.
Furthermore,
the Board has determined that each of the members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance
Committee, is independent within the meaning of Nasdaq director independence standards applicable to members of such committees, as currently
in effect.
The
Compensation Committee members also qualify as “non-employee directors” within the meaning of Section 16 of the Exchange
Act.
SELLING
STOCKHOLDERS
The
shares of common stock being offered by the selling stockholders consists of those previously issued to the selling stockholders and
those issuable to the selling stockholders upon conversion of the Series B Preferred Stock and the exercise of the Warrants. When we
refer to the “selling stockholders” in this prospectus, we mean the persons listed in the table below, and the pledgees,
donees, transferees, assignees, successors, designees and others who later come to hold any of the selling stockholders’ interest
in the common stock other than through a public sale.
The
table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock by
the selling stockholders. The second column lists the number of shares of Common Stock beneficially owned by the selling stockholders,
based on its ownership of the shares of common stock as of May 27, 2025.
The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders.
The
fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.
We
cannot advise you as to whether the selling stockholders will in fact sell any or all of such shares of common stock. In addition, the
selling stockholders may sell, transfer or otherwise dispose of, at any time and from time to time, the shares of common stock in transactions
exempt from the registration requirements of the Securities Act after the date of this prospectus. For purposes of this table, we have
assumed that the selling stockholders will have sold all of the securities covered by this prospectus upon the completion of the offering.
The
selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
| Name
of Selling Stockholder | |
Number
of Shares of Common Stock Beneficially Owned Prior to Offering | | |
Shares
of Common Stock Offered Hereby | | |
Number
of Shares of Common Stock Owned After Offering (1) | | |
% | |
| Legend Consulting,
LLC | |
| 139,333 | | |
| 139,333 | (2) | |
| - | | |
| * | |
| Shawn Zarb | |
| 454,667 | | |
| 454,667 | (3) | |
| - | | |
| * | |
| Undervalued Investor Media
Inc. | |
| 69,667 | | |
| 69,667 | (4) | |
| - | | |
| * | |
| Spartan Crest Capital Corp. | |
| 543,000 | | |
| 218,000 | (5) | |
| 325,000 | (13) | |
| 2.27 | |
| Indigo Capital LP | |
| 1,445,482 | | |
| 1,445,482 | (6) | |
| - | | |
| * | |
| Abri Advisors, Ltd. | |
| 367,976 | | |
| 367,976 | (7) | |
| - | | |
| * | |
| MAAB Global Ltd. | |
| 451,190 | | |
| 117,857 | (8) | |
| 333,333 | (14) | |
| 2.32 | |
| Clover Crest Bahamas Ltd. | |
| 412,500 | | |
| 412,500 | (9) | |
| - | | |
| * | |
| IG Holdings, LLC | |
| 70,000 | | |
| 70,000 | (10) | |
| - | | |
| * | |
| Joseph Fooks | |
| 155,555 | | |
| 155,555 | (11) | |
| - | | |
| * | |
| The Tiger Cub Trust | |
| 605,000 | | |
| 605,000 | (12) | |
| - | | |
| * | |
| Mill End Capital, Ltd |
|
|
100,000 |
|
|
|
100,000 |
(15) |
|
|
- |
|
|
|
* |
|
| Outside The Box Capital,
Inc. | |
| 68,181 | | |
| 68,181 | (16) | |
| - | | |
| * | |
| Anita Rovazzi | |
| 37,500 | | |
| 37,500 | (17) | |
| - | | |
| * | |
| Yuliana
Ferreira Garcia | |
| 200,000 | | |
| 200,000 | (18) | |
| - | | |
| * | |
| Total | |
| 5,120,051 | | |
| 4,461,718 | | |
| 658,333 | | |
| | |
* Less than 1.0%
| | (1) | This
column assumes full exercise of the warrants and conversion of the notes and preferred stock
owned by the Selling Stockholders for shares of common stock offered hereby and the subsequent
sale of all such shares of common stock. |
| (2) | Consists
of (i) 73,333 shares of Common Stock issuable upon conversion of 100 shares of Series B Preferred
Stock with each share having a stated value of $1,100 and a conversion price of $1.50 per
share; and (ii) 66,000 shares of Common Stock issuable upon exercise of warrants at an exercise
price of $1.50 per share. David Murtha holds voting and dispositive power over the shares
held by Legend Consulting, LLC. The address of Legend Consulting, LLC is 2240 Village Walk
Drive, #2315, Henderson, NV 89052. |
| (3) | Consists
of (i) 256,667 shares of Common Stock previously issued upon conversion of Series B Preferred
Stock at a conversion price of $1.50 per share; and (ii) 198,000 shares of Common Stock issuable
upon exercise of warrants at an exercise price of $1.50 per share. Shawn Zarb holds voting
and dispositive power over the shares held by Shawn Zarb. The address of Shawn Zarb is 2680
Matheson Blvd, Suite 102, E Mississauga, Ontario L4W 5M2 Canada. |
| (4) | Consists
of (i) 36,667 shares of Common Stock issuable upon conversion of 50 shares of Series B Preferred
Stock with each share having a stated value of $1,100 and a conversion price of $1.50 per
share; and (ii) 33,000 shares of Common Stock issuable upon exercise of warrants at an exercise
price of $1.50 per share. Kelvin Coelho holds voting and dispositive power over the shares
held by Undervalued Investor Media Inc. The address of Undervalued Investor Media Inc. is
2202 Green Orchard Place, Oakville, Ontario, Canada L6H 4V4. |
| (5) | Consists
of (i) 20,000 shares of Common Stock previously issued upon conversion of Series B Preferred
Stock at a conversion price of $1.50 per share; and (ii) 198,000 shares of Common Stock issuable
upon exercise of warrants at an exercise price of $1.50 per share. Steve Stathopoulos holds
voting and dispositive power over the shares held by Spartan Crest Capital Corp. The address
of Spartan Crest Capital Corp. is 21 Taylor Drive, Toronto, Ontario, Canada M4C 3B4. |
| (6) | Consists
of (i) 366,667 shares of Common Stock issuable upon conversion of 500 shares of Series B
Preferred Stock with each share having a stated value of $1,100 and a conversion price of
$1.50 per share; (ii) 80,000 shares of Common Stock purchased at a price of $2.50 per share;
(iii) 330,000 shares of Common Stock issuable upon exercise of warrants at an exercise
price of $1.50 per share; (iv) 275,482 shares of Common Stock issuable upon exercise of
warrants at an exercise price of $1.815 per share; and (v) 393,333 shares of Common Stock
issuable upon conversion that $500,000 Amended and Restated Convertible Promissory Note dated
May 27, 2025 with an effective date as of April 15, 2025 with a fixed conversion price of
$1.50 per share. Christian Girodet holds voting and dispositive power over the shares
held by Indigo Capital LP. The address of Indigo Capital LP is 89 Nexus Way, Camana Bay,
Grand Cayman, KY1-9009 Cayman Islands. |
| (7) | Consists
of (i) 73,333 shares of Common Stock previously issued upon conversion of Series B Preferred
Stock at a conversion price of $1.50 per share; and (ii) 294,643 shares of Common Stock issuable
upon exercise of warrants at an exercise price of $1.50 per share. Jeffrey Tirman holds voting
and dispositive power over the shares held by Abri Advisors, Ltd. The address of Abri Advisors,
Ltd is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. |
| (8) | Consists
of 117,857 shares of Common Stock issuable upon exercise of warrants at an exercise price
of $1.50 per share. Bruce Bent holds voting and dispositive power over the shares held by
MAAB Global Ltd. The address of MAAB Global Ltd. is 34 Gibson Avenue, Toronto, Ontario Canada
M5R 1T5. |
| (9) | Consists
of 412,500 shares of Common Stock issuable upon exercise of warrants at an exercise price
of $1.50 per share. Eric Strachan holds voting and dispositive power over the shares held
by Clover Crest Bahamas Ltd. The address of Clover Crest Bahamas Ltd. is Greenway Corporate
Centre Lyford Cay, Bahamas. |
| (10) | Consists
of 70,000 shares of Common Stock purchased at a price of $1.50 per share. Cheryl Hintzen
holds voting and dispositive power over the shares held by IG Holdings, LLC. The address
of IG Holdings, LLC. is 1819 E. Morten Avenue, Suite 180, Phoenix, AZ 85020. |
| (11) | Consists
of 155,555 shares of Common Stock purchased at a price of $2.25 per share. Joseph Fooks holds
voting and dispositive power over the shares held by Joseph Fooks. The address of Joseph
Fooks is 123 Dunblain Avenue, North York, Ontario, Canada M5M 2S4. |
| (12) | Shares issued to Jacob Cohen and transferred into the name of The Tiger
Cub Trust, in which Mr. Cohen serves as the Trustee. Mr. Cohen is the Chairman and Chief
Executive Officer of the Company. Jacob Cohen holds voting and dispositive power over the
shares held by The Tiger Cub Trust. The address of The Tiger Cub Trust is 19 Ryddington Pl,
Dallas, TX 75230. |
| (13) | Consists
of 325,000 shares of Common Stock issued pursuant to that Consulting Agreement with
Spartan Crest Capital on April 15, 2025. These 325,000 shares of Common Stock were
issued under the Company’s 2022 Equity Incentive Plan. |
| (14) | Consists
of 333,333 shares of Common Stock issued on April 2, 2025 in connection with the conversion
of $500,000 of debt at a price of $1.50 per share. The purchased debt was previously owed
to Barstool Sports, Inc. and purchased by MAAB Global, Ltd in January 2025. |
| (15) | Consists
of 100,000 shares of Common Stock issued to Mill End Capital Ltd. pursuant to the conversion
of a promissory note, originally dated December 13, 2024 and converted into shares of Common
Stock on January 15, 2025 at a price of $1.50 per share. George Sandhu holds voting and dispositive
power over the shares held by Mill End Capital, Ltd. The address of Mill End Capital, Ltd.
is Trident Chambers, P.O. Box 146, Tortola, Road Town, VG1110, British Virgin Islands.
|
| | (16) | Consists
of (i) 45,454 shares of Common Stock purchased at a price of $1.65 per share; and (ii) 22,727
shares of Common Stock issuable upon exercise of warrants at an exercise price of $3.00 per
share. Kelvin Coelho holds voting and dispositive power over the shares held by Outside The
Box Capital, Inc. The address of Outside The Box Capital, Inc. is 2202 Green Orchard Place,
Oakville, Ontario, Canada L6H 4V4. |
| | (17) | Consists
of (i) 25,000 shares of Common Stock purchased at a price of $1.65 per share; and (ii) 12,500
shares of Common Stock issuable upon exercise of warrants at an exercise price of $3.00 per
share. Anita Rovazzi holds voting and dispositive power over the shares held by Anita Rovazzi.
The address of Anita Rovazzi is 151 Roxborough Street East, Toronto, Ontario, Canada, M4W
1V9. |
| | (18) | Consists
of 200,000 shares of Common Stock as previously issued to Spartan Crest Capital Corp. upon
conversion of Series B Preferred Stock at a conversion price of $1.50 per share and subsequently
transferred to Yuliana Ferreira Garcia in a private transaction. Yuliana Ferreira Garcia
holds voting and dispositive power over the shares held by Yuliana Ferreira Garcia. The address
of Yuliana Ferreira Garcia is 181 Bowie Ave, Toronto, Ontario Canada M6E 2R5. |
Each
time a selling stockholder sells any shares of common stock offered by this prospectus, it is required to provide you with this prospectus
and the related prospectus supplement, if any, containing specific information about the selling stockholder and the terms of the shares
of common stock being offered in the manner required by the Securities Act.
No
offer or sale may occur unless the registration statement that includes this prospectus has been declared effective by the SEC and remains
effective at the time the selling stockholders offer or sell shares of common stock. We are required, under certain circumstances, to
update, supplement or amend this prospectus to reflect material developments in our business, financial position and results of operations
and may do so by an amendment to this prospectus or a prospectus supplement.
DESCRIPTION
OF CAPITAL STOCK
The
following summary is a description of the material terms of our capital stock and is not complete. You should also refer to the Mangoceuticals,
Inc. Certificate of Formation, as amended and Bylaws, which are included as exhibits to the registration statement of which this prospectus
forms a part, and the applicable provisions of the Texas Business Organizations Code.
Authorized
Capitalization
The
total number of authorized shares of our common stock is 200,000,000 shares, $0.0001 par value per share. The total number of “blank
check” authorized shares of our preferred stock is 10,000,000 shares, $0.0001 par value per share. There are 6,000 shares of Series
B Preferred Stock authorized for issuance and, as of May 27, 2025, 682 shares of Series B Preferred Stock outstanding. There are
6,250,000 shares of Series C Preferred Stock authorized for issuance and, as of May 27, 2025, 980,000 shares of Series C Preferred
Stock outstanding.
Common
Stock
Voting
Rights. Each share of our common stock is entitled to one vote on all shareholder matters. Shares of our common stock do not
possess any cumulative voting rights.
Except
for the election of directors, if a quorum is present, an action on a matter is approved if it receives the affirmative vote of the holders
of the majority of the shares entitled to vote on, and who voted for, against, or expressly abstained with respect to, the matter at
a shareholders’ meeting of a corporation at which a quorum is present is the act of the shareholders, unless otherwise required
by applicable law. The election of directors is determined by a plurality of the votes cast in respect of the shares present in person
or represented by proxy at the meeting and entitled to vote, meaning that the nominees with the greatest number of votes cast, even if
less than a majority, will be elected. The rights, preferences and privileges of holders of common stock are subject to, and may be impacted
by, the rights of the holders of shares of any series of preferred stock that we have designated, or may designate and issue in the future.
Dividend
Rights. Each share of our common stock is entitled to equal dividends and distributions per share with respect to the common
stock when, as and if declared by our Board of Directors, subject to any preferential or other rights of any outstanding preferred stock.
Liquidation
and Dissolution Rights. Upon liquidation, dissolution or winding up, our common stock will be entitled to receive pro rata on
a share-for-share basis, the assets available for distribution to the shareholders after payment of liabilities and payment of preferential
and other amounts, if any, payable on any outstanding preferred stock.
No
Preemptive, Conversion, or Redemption Rights. Holders of our outstanding common stock have no preemptive, conversion, or redemption
rights. Shares of our common stock are not assessable. To the extent that additional shares of our common stock may be issued in the
future, the relative interests of the then existing shareholders may be diluted.
Fully
Paid Status. All outstanding shares of the Company’s common stock are validly issued, fully paid and non-assessable.
Preferred
Stock
Our
Board of Directors has the authority to issue undesignated shares of “blank check” preferred stock in one or more series
and to fix the designation, relative powers, preferences and rights and qualifications, limitations or restrictions of all shares of
each such series, including, without limitation, dividend rates, conversion rights, voting rights, redemption and sinking fund provisions,
liquidation preferences and the number of shares constituting each such series, without any further vote or action by the stockholders.
The issuance of additional preferred stock could decrease the amount of earnings and assets available for distribution to holders of
our common stock or adversely affect the rights and powers, including voting rights, of the holders of our common stock and could, among
other things, have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders.
There
are 6,000 shares of Series B Preferred Stock authorized for issuance and 682 shares of Series B Preferred Stock outstanding. For a description
of the Series B Preferred Stock’s rights, see the section entitled “Description of the Series B Convertible Preferred Stock”
beginning on page 15 of this prospectus. There are 6,250,000 shares of Series C Preferred Stock authorized for issuance and 980,000 shares
of Series C Preferred Stock outstanding. For a description of the Series C Preferred Stock’s rights, see the section entitled “Description
of the 6% Series C Convertible Cumulative Preferred Stock” beginning on page 15 of this prospectus.
Business
Combinations under Texas Law
A
number of provisions of Texas law, our Certificate of Formation, as amended, and Bylaws could make it more difficult for the acquisition
of our company by means of a tender offer, a proxy contest or otherwise and the removal of incumbent officers and directors. These provisions
are intended to discourage coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control
of our company to negotiate first with our Board of Directors.
Title
2, Chapter 21, Subchapter M of the Texas Business Organizations Code (the “Texas Business Combination Law”) provides that
a Texas corporation may not engage in specified types of business combinations, including mergers, consolidations and asset sales, with
a person, or an affiliate or associate of that person, who is an “affiliated shareholder,” for a period of three years from
the date that person became an affiliated shareholder, subject to certain exceptions (described below). An “affiliated shareholder”
is generally defined as the holder of 20% or more of the corporation’s voting shares. The law’s prohibitions do not apply
if the business combination or the acquisition of shares by the affiliated shareholder was approved by the Board of Directors of the
corporation before the affiliated shareholder became an affiliated shareholder; or the business combination was approved by the affirmative
vote of the holders of at least two-thirds of the outstanding voting shares of the corporation not beneficially owned by the affiliated
shareholder, at a meeting of shareholders called for that purpose, not less than six months after the affiliated shareholder became an
affiliated shareholder.
This
law applies to Texas corporations which have more than 100 of record shareholders and which have not affirmatively elected to not be
governed by such law, we do not have more than 100 record shareholders and are not considered an “issuing public corporation”
for purposes of this law. Separately, we have elected in our Certificate of Formation, as amended, to not be governed by the Texas Business
Corporation Law. Notwithstanding the above, the Texas Business Combination Law does not apply to the following:
| ● |
the
business combination of an issuing public corporation: where the corporation’s original charter or bylaws contain a provision
expressly electing not to be governed by the Texas Business Combination Law; or that adopts an amendment to its charter or bylaws,
by the affirmative vote of the holders, other than affiliated shareholders, of at least two-thirds of the outstanding voting shares
of the corporation, expressly electing not to be governed by the Texas Business Combination Law and so long as the amendment does
not take effect for 18 months following the date of the vote and does not apply to a business combination with an affiliated shareholder
who became affiliated on or before the effective date of the amendment; |
| ● |
a
business combination of an issuing public corporation with an affiliated shareholder that became an affiliated shareholder inadvertently,
if the affiliated shareholder divests itself, as soon as possible, of enough shares to no longer be an affiliated shareholder and
would not at any time within the three-year period preceding the announcement of the business combination have been an affiliated
shareholder but for the inadvertent acquisition; |
| |
|
| ● |
a
business combination with an affiliated shareholder who became an affiliated shareholder through a transfer of shares by will or
intestacy and continuously was an affiliated shareholder until the announcement date of the business combination; or |
| |
|
| ● |
a
business combination of a corporation with its wholly owned Texas subsidiary if the subsidiary is not an affiliate or associate of
the affiliated shareholder other than by reason of the affiliated shareholder’s beneficial ownership of voting shares of the
corporation. |
As
discussed above, our Certificate of Formation, as amended, contains a provision expressly providing that we are not subject to the Texas
Business Combination Law.
Anti-Takeover
Provisions of Our Charter Documents
Our
Certificate of Formation, as amended, and Bylaws contain various provisions intended to promote the stability of our shareholder base
and render more difficult certain unsolicited or hostile attempts to take us over, that could disrupt us, divert the attention of our
directors, officers and employees and adversely affect the independence and integrity of our business. These provisions include:
| ● |
Special
Meetings of Shareholders - Our Bylaws provide that special meetings of the shareholders may only be called by our Chairman, our
President, or upon written notice to our Board of Directors by our shareholders holding not less than 30% of our outstanding voting
capital stock. |
| |
|
| ● |
Bylaws
- Our Bylaws may be amended by our Board of Directors alone. |
| |
|
| ● |
Advance
Notice Procedures - Our Bylaws establish an advance notice procedure for shareholder proposals to be brought before an annual
meeting of our shareholders. At an annual meeting, our shareholders elect a Board of Directors and transact such other business as
may properly be brought before the meeting. By contrast, at a special meeting, our shareholders may transact only the business for
the purposes specified in the notice of the meeting. |
| |
|
| ● |
No
cumulative voting - Our Certificate of Formation, as amended, and Bylaws do not include a provision for cumulative voting in
the election of directors. |
| |
|
| ● |
Vacancies
- Our Bylaws provide that vacancies on our Board may be filled by a majority of directors in office, although less than a quorum,
and not by the shareholders. |
| |
|
| ● |
Preferred
Stock - Our Certificate of Formation, as amended, allows us to issue up to 10,000,000 shares of preferred stock. The undesignated
preferred stock may have rights senior to those of the common stock and that otherwise could adversely affect the rights and powers,
including voting rights, of the holders of common stock. In some circumstances, this issuance could have the effect of decreasing
the market price of the common stock as well as having an anti-takeover effect. |
| |
|
| ● |
Authorized
but Unissued Shares - Our Board of Directors may cause us to issue our authorized but unissued shares of common stock in the
future without shareholders’ approval. These additional shares may be utilized for a variety of corporate purposes, including
future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized
but unissued shares of common stock could render more difficult or discourage an attempt to obtain control of a majority of our common
stock by means of a proxy contest, tender offer, merger or otherwise. |
| |
|
| ● |
Action
by Written Consent - Any action required or permitted to be taken by our common shareholders may be effected by written consent
of the shareholders having not less than the minimum percentage of the vote required by the Texas Business Organizations Code for
the proposed corporate action. |
| |
|
| ● |
Majority
Vote - Under the Texas Business Organizations Code, the affirmative vote of the holders of at least two-thirds of the outstanding
voting shares is typically required to approve certain fundamental transactions, including amending a company’s Certificate
of Formation, approving mergers and conversions, and winding up the corporation; however, in compliance with the Texas Business Organizations
Code, our Certificate of Formation, as amended, provides that all such fundamental transactions may be approved by majority vote
of shareholders. |
Warrants
and Options
As
of May 27, 2025, we have options to purchase 60,000 shares of common stock outstanding, which have an exercise price of
$16.50 per share and a term through September 1, 2027; options to purchase 83,333 shares of common stock outstanding, which have an
exercise price of $4.80 per share and a term through December 28, 2028; options to purchase 13,333 shares of common stock
outstanding, which have an exercise price of $5.50 per share and a term through July 12, 2027; warrants to purchase 65,033 shares of
common stock outstanding, which have an exercise price of $15.00 per share and terms ending between August 16, 2027 and December 22,
2027; warrants to purchase 5,833 shares of common stock with an exercise price of $75.00 per share, which are exercisable until
September 20, 2028; warrants to purchase 21,467 shares of common stock with an exercise price of $5.63 per share, which are
exercisable until January 20, 2029, warrants to purchase 1,650,000 shares of common stock with an exercise price of $1.50 per share,
which are exercisable between December 17, 2029 and January 05, 2030; warrants to purchase 35,227 shares of common stock with an
exercise price of $3.00 per share, which are exercisable until May 22, 2028; and warrants to purchase 275,482 shares of common stock
with an exercise price of $1.815 per share, which are exercisable until May 26, 2030.
Limitations
on Liability and Indemnification of Officers and Directors
As
authorized by Chapter 8 of the Texas Business Organizations Code, we may indemnify our officers and directors (and our former officers
and directors) against expenses incurred by such persons in connection with any (A) threatened, pending, or completed action or other
proceeding, whether civil, criminal, administrative, arbitrative, or investigative; (B) an appeal of an action or proceeding described
by (A); and (C) an inquiry or investigation that could lead to an action or proceeding described by (A), involving such persons in their
capacities as officers and directors, if it is determined in accordance with the Texas Business Organizations Code that: (1) the person:
(A) acted in good faith; (B) reasonably believed: (i) in the case of conduct in the person’s official capacity, that the person’s
conduct was in the enterprise’s best interests; and (ii) in any other case, that the person’s conduct was not opposed to
the enterprise’s best interests; and (C) in the case of a criminal proceeding, did not have a reasonable cause to believe the person’s
conduct was unlawful; (2) with respect to expenses, the amount of expenses other than a judgment is reasonable; and (3) indemnification
should be paid.
Under
Texas law, corporations may also purchase and maintain insurance or make other financial arrangements on behalf of any person who is
or was a director or officer (or is serving at our request as a director or officer of another corporation) for any liability asserted
against such person and any expenses incurred by him in his capacity as a director or officer.
Additionally,
our Bylaws (“Bylaws”), state that we shall indemnify every (i) present or former director, advisory director or officer of
us, (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority
granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) (each
an “Indemnitee”).
Our
Bylaws provide that we shall indemnify an Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts
paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any proceeding in which he was, is
or is threatened to be named as a defendant or respondent, or in which he was or is a witness without being named a defendant or respondent,
by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, if it is determined
that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his official capacity, that
his conduct was in our best interests and, in all other cases, that his conduct was at least not opposed to our best interests, and (c)
in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in
the event that an Indemnitee is found liable to us or is found liable on the basis that personal benefit was improperly received by the
Indemnitee, the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the proceeding
and (ii) shall not be made in respect of any proceeding in which the Indemnitee shall have been found liable for willful or intentional
misconduct in the performance of his duty to us.
Except
as provided above, the Bylaws provide that no indemnification shall be made in respect to any proceeding in which such Indemnitee has
been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an
action taken in the Indemnitee’s official capacity, or (b) found liable to us. The termination of any proceeding by judgment, order,
settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not
meet the requirements set forth in clauses (a) or (b) above. An Indemnitee shall be deemed to have been found liable in respect of any
claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of
all appeals therefrom. Reasonable expenses shall include, without limitation, all court costs and all fees and disbursements of attorneys’
fees for the Indemnitee. The indemnification provided shall be applicable whether or not negligence or gross negligence of the Indemnitee
is alleged or proven.
Neither
our Bylaws nor our Certificate of Formation include any specific indemnification provisions for our officers or directors against liability
under the Securities Act. Additionally, insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Listing
Our
common stock trades on The Nasdaq Capital Market under the symbol “MGRX”. Trading of our common stock on The Nasdaq Capital
Market began on March 21, 2023.
Transfer
Agent
The
transfer agent for our common stock is ClearTrust, LLC located at 16540 Pointe Village Drive, Suite 210, Lutz, Florida, 33558.
SHARES
ELIGIBLE FOR FUTURE SALE
In
general, under Rule 144, a person who has beneficially owned restricted shares for at least six months would be entitled to sell those
securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90
days preceding, a sale and (2) we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the
sale and are current in filing our periodic reports. Persons who have beneficially owned restricted shares of common stock for at least
six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional
restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not
exceed 1% of the number of shares of common stock outstanding, which will equal approximately 458,388 shares immediately after this offering,
based on the number of shares of common stock outstanding as August 6, 2024. Such sales by affiliates must also comply with the manner
of sale and notice provisions of Rule 144 and to the availability of current public information about us.
A
person (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities
within the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of shares that
does not exceed the greater of one percent of the then outstanding shares of our common stock or the average weekly trading volume of
our common stock on the during the four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions,
notice requirements, and the availability of current public information about us.
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES FOR
NON-U.S.
HOLDERS OF COMMON STOCK
The
following are the material U.S. federal income tax consequences of the ownership and disposition of our common stock acquired in this
offering by a “Non-U.S. Holder” that does not own, and has not owned, actually or constructively, more than 5% of common
stock . You are a Non-U.S. Holder if for U.S. federal income tax purposes you are a beneficial owner of our common stock that is:
| ● |
a
nonresident alien individual; |
| |
|
| ● |
a
foreign corporation; or |
| |
|
| ● |
a
foreign estate or trust. |
You
are not a Non-U.S. Holder if you are a nonresident alien individual present in the United States for 183 days or more in the taxable
year of disposition, or if you are a former citizen or former resident of the United States for U.S. federal income tax purposes. If
you are such a person, you should consult your tax adviser regarding the U.S. federal income tax consequences of the ownership and disposition
of our common stock.
If
a partnership or other pass-through entity (including an entity or arrangement treated as a partnership or other type of pass-through
entity for U.S. federal income tax purposes) owns our common stock, the tax treatment of a partner or beneficial owner of the entity
may depend upon the status of the owner, the activities of the entity and certain determinations made at the partner or beneficial owner
level. Partners and beneficial owners in partnerships or other pass-through entities that own our common stock should consult their own
tax advisors as to the particular U.S. federal income and estate tax consequences applicable to them.
This
discussion is based on the Internal Revenue Code of 1986, as amended to the date hereof (the “Code”), administrative pronouncements,
judicial decisions and final, temporary and proposed Treasury regulations, changes to any of which subsequent to the date of this prospectus
may affect the tax consequences described herein, possibly with retroactive effect. This discussion does not describe all of the tax
consequences that may be relevant to you in light of your particular circumstances, including alternative minimum tax and Medicare contribution
tax consequences and does not address any aspect of state, local or non-U.S. taxation, or any taxes other than income and estate taxes.
You should consult your tax adviser with regard to the application of the U.S. federal tax laws to your particular situation, as well
as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
Dividends
As
discussed under “Dividend Policy” above, we do not anticipate paying any cash dividends in the foreseeable future. In the
event that we do make distributions of cash or other property, those distributions will constitute dividends for U.S. federal income
tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.
To the extent those distributions exceed our current and accumulated earnings and profits, they will constitute a return of capital,
which will first reduce your basis in our common stock, but not below zero, and then will be treated as gain from the sale of our common
stock.
Dividends
paid to you generally will be subject to withholding tax at a 30% rate or a reduced rate specified by an applicable income tax treaty.
In order to obtain a reduced rate of withholding, you will be required to provide a properly executed applicable Internal Revenue Service
(“IRS”) Form W-8 certifying your entitlement to benefits under a treaty.
If
dividends paid to you are effectively connected with your conduct of a trade or business in the United States (and, if required by an
applicable income tax treaty, are attributable to a permanent establishment or fixed base maintained by you in the United States), you
will generally be taxed on the dividends in the same manner as a U.S. person. In this case, you will be exempt from the withholding tax
discussed in the preceding paragraph, although you will be required to provide a properly executed IRS Form W-8ECI in order to claim
an exemption from withholding. You should consult your tax adviser with respect to other U.S. tax consequences of the ownership and disposition
of our common stock, including the possible imposition of a branch profits tax at a rate of 30% (or a lower treaty rate) if you are a
corporation.
Information
Reporting and Backup Withholding
Information
returns are required to be filed with the IRS in connection with payments of dividends on our common stock. Unless you comply with certification
procedures to establish that you are not a U.S. person, information returns may also be filed with the IRS in connection with the proceeds
from a sale or other disposition of our common stock. You may be subject to backup withholding on payments on our common stock or on
the proceeds from a sale or other disposition of our common stock unless you comply with certification procedures to establish that you
are not a U.S. person or otherwise establish an exemption. Your provision of a properly executed applicable IRS Form W-8 certifying your
non-U.S. status will permit you to avoid backup withholding. Amounts withheld under the backup withholding rules are not additional taxes
and may be refunded or credited against your U.S. federal income tax liability, provided the required information is timely furnished
to the IRS.
FATCA
Withholding Taxes
Payments
to certain foreign entities of dividends on common stock of a U.S. issuer are subject to a withholding tax (separate and apart from,
but without duplication of, the withholding tax described above) at a rate of 30%, unless various U.S. information reporting and due
diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied
or an exemption from these rules applies. Under proposed regulations issued by the Treasury Department on December 13, 2018, which state
that taxpayers may rely on the proposed regulations until final regulations are issued, this withholding tax will not apply to the gross
proceeds from any sale or disposition of common stock. An intergovernmental agreement between the United States and an applicable foreign
country may modify these requirements. Non-U.S. holders should consult their tax advisors regarding the possible implications of this
withholding tax on dividends on common stock.
PLAN
OF DISTRIBUTION
We
are registering the shares of common stock to be issued to permit the resale of these shares of common stock, after they are issued,
by the holders of the common stock from time to time after the date of this prospectus. We will not receive any of the proceeds from
the sale by the selling stockholders of the shares of common stock. Any proceeds received by the Company from the sale of shares of common
stock from the exercise of the Warrants will be used for general working capital. See section entitled “Use of Proceeds”.
We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The
selling stockholders may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers, or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common
stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block
transactions, pursuant to one or more of the following methods:
| ● |
on
any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
| ● |
in
the over-the-counter market; |
| ● |
in
transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| ● |
through
the writing or settlement of options, whether such options are listed on an options exchange or otherwise; |
| ● |
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● |
block
trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; |
| ● |
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● |
an
exchange distribution in accordance with the rules of the applicable exchange; |
| ● |
privately
negotiated transactions; |
| ● |
short
sales made after the date the Registration Statement is declared effective by the SEC; |
| ● |
agreements
between broker-dealers and the selling stockholders to sell a specified number of such shares at a stipulated price per share; |
| ● |
a
combination of any such methods of sale; and |
| ● |
any
other method permitted pursuant to applicable law. |
The
selling stockholders may also sell shares of common stock under Rule 144 promulgated under the Securities Act, if available, rather than
under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means not described in
this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers, or agents may receive commissions in the form of discounts, concessions, or commissions
from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom
they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be
in excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise,
the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares
of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short
and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell
such shares.
The
selling stockholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee, or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of common
stock in other circumstances in which case the transferees, donees, pledgees, or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
To
the extent required by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating
in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement,
if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered and the terms of
the offering, including the name or names of any broker-dealers or agents, any discounts, commissions, and other terms constituting compensation
from the selling stockholders and any discounts, commissions, or concessions allowed or re-allowed or paid to broker-dealers.
Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is available and is complied with.
There
can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration
statement, of which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable,
Regulation M under the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged
in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All
of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
We
will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, including, without
limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, a selling
stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities,
including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders
will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities
under the Securities Act that may arise from any written information furnished to us by the selling stockholder specifically for use
in this prospectus, in accordance with the related registration rights agreements or we may be entitled to contribution.
Once
sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the
hands of persons other than our affiliates.
LEGAL
MATTERS
The
validity of the shares of our common stock offered hereby will be passed upon for us by Lucosky Brookman LLP.
EXPERTS
The
consolidated financial statements of Mangoceuticals, Inc. as of December 31, 2024 and December 31, 2023, and for the years then ended,
incorporated by reference in this prospectus and registration statement have been audited by Turner, Stone & Company, L.L.P., Dallas,
Texas, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated
financial statements have been so incorporated by reference in reliance upon the report of such firm given their authority as experts
in accounting and auditing. The report on the consolidated financial statements contains an explanatory paragraph regarding Mangoceuticals,
Inc.’s ability to continue as a going concern.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information from other documents that we file with it, which means that we can
disclose important information to you by referring you to those publicly available documents. The information incorporated by reference
is considered to be part of this prospectus. Information in this prospectus supersedes information incorporated by reference that we
filed with the SEC prior to the date of this prospectus. We incorporate by reference into this prospectus and the registration statement
of which this prospectus is a part the information or documents listed below that we filed with the SEC (File No. 001-41615):
| |
● |
Our
Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 20, 2025; |
| |
● |
Our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 filed with the SEC on May 15, 2025; |
| |
● |
Our
Current Reports on Form 8-K filed with the SEC on January 8, 2025, January 15, 2025, January 21, 2025, January 31, 2025, February 7, 2025, February 12, 2025, February 12, 2025, February 19, 2025, March 19, 2025, March 25, 2025, March 28, 2025, April 2, 2025,
April 8, 2025, April 11, 2025, April 17, 2025, April 25, 2025, May 6, 2025 and May 23, 2025 (in each case, except for information
contained therein which is furnished rather than filed); and |
| |
● |
The
description of our Common Stock contained in our registration statement on Form 8-A12B filed with the SEC on February 6, 2023. |
| |
● |
Notwithstanding
the statements in the preceding paragraphs, no document, report or exhibit (or portion of any of the foregoing) or any other information
that we have “furnished” to the SEC pursuant to the Exchange Act shall be incorporated by reference into this prospectus. |
We
also incorporate by reference into this prospectus all documents (other than current reports furnished under Item 2.02 or Item 7.01 of
Form 8-K and exhibits filed on such form that are related to such items) that are filed by us with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act (i) after the date of the initial filing of the registration statement of which this prospectus
forms a part and prior to effectiveness of the registration statement, or (ii) after the date of this prospectus but prior to the termination
of the offering. These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as proxy statements on Schedule 14A.
Upon
request, we will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered
a copy of the documents incorporated by reference into this prospectus. You may request a copy of these filings, and any exhibits we
have specifically incorporated by reference as an exhibit in this prospectus, at no cost by writing or telephoning us at the following
address:
Mangoceuticals,
Inc.
Attn:
Investor Relations
15110
N. Dallas Parkway, Suite 600
Dallas,
Texas 75248
(214)
242-9619
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus modifies, supersedes
or replaces such statement.
WHERE
YOU CAN FIND MORE INFORMATION
We
are a reporting company and file annual, quarterly and current reports, and other information with the SEC. Our filings are also available
to the public from the SEC’s website at www.sec.gov. The SEC’s website contains reports, proxy and information statements
and other information regarding registrants that file electronically with the SEC.
This
prospectus is part of a registration statement on Form S-1 that we filed with the SEC to register the securities offered hereby under
the Securities Act. This prospectus does not contain all of the information included in the registration statement, including certain
exhibits and schedules. For further information with respect to our company and the securities offered by this prospectus, as well as
the exhibits and schedules to the registration statement, we refer you to the registration statement and those exhibits and schedules.
You may obtain the registration statement and exhibits to the registration statement from the SEC at the address listed above or from
the SEC’s website.
4,461,718
Shares of Common Stock
Mangoceuticals,
Inc.
PROSPECTUS
May
[ ], 2025
PART
II
Information
Not Required in the Prospectus
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth costs and expenses payable by us in connection with the sale and distribution of the securities being registered.
All of the amounts shown are estimates, except for the SEC registration fee:
| | |
Amount to be Paid | |
| SEC registration fee | |
$ | 1,250.05 | |
| Legal fees and expenses | |
| | |
| Accounting expenses | |
| | |
| Total expenses | |
$ | | |
Item
14. Indemnification of Directors and Officers.
As
authorized by Chapter 8 of the Texas Business Organizations Code, we may indemnify our officers and directors (and our former officers
and directors) against expenses incurred by such persons in connection with any (A) threatened, pending, or completed action or other
proceeding, whether civil, criminal, administrative, arbitrative, or investigative; (B) an appeal of an action or proceeding described
by (A); and (C) an inquiry or investigation that could lead to an action or proceeding described by (A), involving such persons in their
capacities as officers and directors, if it is determined in accordance with the Texas Business Organizations Code that: (1) the person:
(A) acted in good faith; (B) reasonably believed: (i) in the case of conduct in the person’s official capacity, that the person’s
conduct was in the enterprise’s best interests; and (ii) in any other case, that the person’s conduct was not opposed to
the enterprise’s best interests; and (C) in the case of a criminal proceeding, did not have a reasonable cause to believe the person’s
conduct was unlawful; (2) with respect to expenses, the amount of expenses other than a judgment is reasonable; and (3) indemnification
should be paid.
Under
Texas law, corporations may also purchase and maintain insurance or make other financial arrangements on behalf of any person who is
or was a director or officer (or is serving at our request as a director or officer of another corporation) for any liability asserted
against such person and any expenses incurred by him in his capacity as a director or officer.
Additionally,
our Bylaws (“Bylaws”), state that we shall indemnify every (i) present or former director, advisory director or officer of
us, (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority
granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) (each
an “Indemnitee”).
Our
Bylaws provide that we shall indemnify an Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts
paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any proceeding in which he was, is
or is threatened to be named as a defendant or respondent, or in which he was or is a witness without being named a defendant or respondent,
by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, if it is determined
that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his official capacity, that
his conduct was in our best interests and, in all other cases, that his conduct was at least not opposed to our best interests, and (c)
in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in
the event that an Indemnitee is found liable to us or is found liable on the basis that personal benefit was improperly received by the
Indemnitee, the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the proceeding
and (ii) shall not be made in respect of any proceeding in which the Indemnitee shall have been found liable for willful or intentional
misconduct in the performance of his duty to us.
Except
as provided above, the Bylaws provide that no indemnification shall be made in respect to any proceeding in which such Indemnitee has
been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an
action taken in the Indemnitee’s official capacity, or (b) found liable to us. The termination of any proceeding by judgment, order,
settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not
meet the requirements set forth in clauses (a) or (b) above. An Indemnitee shall be deemed to have been found liable in respect of any
claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of
all appeals therefrom. Reasonable expenses shall include, without limitation, all court costs and all fees and disbursements of attorneys’
fees for the Indemnitee. The indemnification provided shall be applicable whether or not negligence or gross negligence of the Indemnitee
is alleged or proven.
Neither
our Bylaws nor our Certificate of Formation, as amended, include any specific indemnification provisions for our officers or directors
against liability under the Securities Act. Additionally, insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
Item
15. Recent Sales of Unregistered Securities.
On
January 10, 2024, we renewed a Consulting Agreement with Luca Consulting, LLC (“Luca”), to provide certain management and
consulting services to the Company during the term of the agreement, which is for three months unless otherwise earlier terminated due
to breach of the agreement by either party. In consideration for agreeing to provide the services under the agreement, the Company issued
200,000 shares of the Company’s restricted common stock upon the parties’ entry into the agreement and to pay Luca $15,000
in cash, payable as follows: (a) $5,000 on the signing of the agreement; (b) $5,000 on the tenth of each month throughout the remainder
of the agreement. The Service Agreement includes customary indemnification obligations requiring the Company to indemnify Luca and its
affiliates with regard to certain matters. The shares were valued at $0.28 per share for a total of $56,000.
On
January 11, 2024, we entered into a Consulting Agreement with First Level Capital (“First Level”), to provide certain management
and consulting services to the Company during the term of the agreement, which is for six months unless otherwise earlier terminated
due to breach of the agreement by either party. In consideration for agreeing to provide the services under the agreement, the Company
issued an initial 250,000 shares of the Company’s restricted common stock upon the parties’ entry into the agreement, an
additional 250,000 shares of the Company’s restricted common stock before the end of the term of the agreement and to pay First
Level $60,000 in cash, payable as follows: (a) $60,000 on the signing of the agreement; (b) $60,000 on the approval by the Company. The
Service Agreement includes customary indemnification obligations requiring the Company to indemnify First Level and its affiliates with
regard to certain matters. The initial shares were valued at $0.28 per share for a total of $70,000.
On
March 21, 2024, we entered into Amendment to the of January 10, 2024 consulting agreement with Luca Consulting, LLC (“Luca”)
extending the agreement for an additional 6 months (the “Luca Amendment”). In consideration for entering into the Luca Amendment,
the Company issued 500,000 shares of the Company’s restricted common stock upon the parties’ entry into the Luca Amendment
and agreed to continue to pay Luca $5,000 in cash on the tenth of each month throughout the remainder of the agreement. The shares
were valued at $0.1975 per share for a total of $98,750. The issuance described above was exempt from registration pursuant to Section
4(a)(2), and/or Rule 506 of Regulation D of the Securities Act, since the foregoing issuance did not involve a public offering, the recipient
took the securities for investment and not resale, we took take appropriate measures to restrict transfer, and the recipient was (a)
an “accredited investor”; and/or (b) had access to similar documentation and information as would be required in a Registration
Statement under the Securities Act. The securities are subject to transfer restrictions, and the certificates evidencing the securities
contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or
sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such
securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities
Act and any applicable state securities laws.
Effective
on April 24, 2025, the Company entered into an Intellectual Property Purchase Agreement (the “IP Purchase Agreement”),
with Smokeless Technology Corp. (“Smokeless”). Pursuant to the IP Purchase Agreement, we purchased certain intellectual
property, contracts, and know-how owned by Smokeless related to certain intellectual property and related assets including, without limitation,
all patents, trademarks, product formulations, know-how, agreements, contracts, contractor agreements, supply chain contracts, manufacturing
contacts and agreements for the entrance into a new business involving and surrounding oral pouches as a delivery mechanism for nutritional
and wellness products (collectively, the “Purchased IP”), in consideration for 1,600,000 shares of the Company’s
restricted common stock (the “IP Purchase Shares”) and the Royalty Payments (defined and discussed below).
Pursuant
to the IP Purchase Agreement, we agreed to pay Smokeless a royalty of ten percent (10%) of gross worldwide sales of any product we sell
associated with the Purchased IP, which meets the following requirements: (a) the design of the product was not transferred or provided
for purposes of providing a license to cover an offering of a third party and controlled by us, and (b) the product is sold by us, or
in development with the intention to commercialize (collectively, “Mango Purchased IP Products”), which will go into
effect on April 23, 2026 and are required to be paid in perpetuity to the extent the Mango Purchased IP Products are being sold (the
“Royalty Payments”). The Royalty Payments are required to be paid on an annual basis, within 30 days after the end
of the calendar year.
The
IP Purchase Agreement included standard representations and warranties and confidentiality and indemnification obligations of the parties,
for a transaction of that type and size.
The
IP Purchase Agreement, and the purchase of the Purchased IP, closed on April 24, 2025, upon the parties entry into the IP Purchase Agreement,
and the IP Purchase Shares were issued on April 25, 2025.
Pursuant
to the IP Purchase Agreement, we agreed to pay Smokeless a royalty of ten percent (10%) of gross w
On
April 26, 2024, the Company partially closed 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 (the “First Second Closing Shares”).
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 (the “Second Closing Shares”, and
together with the First Second Closing Shares, the “Second Closing Shares”).
On
May 21, 2024, the Purchaser converted 50 shares of Series B Preferred Stock into 270,936 shares of Common Stock of the Company, pursuant
to the terms of such Series B Preferred Stock.
On
May 22, 2024, the Purchaser converted 155 shares of Series B Preferred Stock into 839,901 shares of Common Stock of the Company, pursuant
to the terms of such Series B Preferred Stock.
On
May 24, 2024, the Purchaser converted 150 shares of Series B Preferred Stock into 812,807 shares of Common Stock of the Company, pursuant
to the terms of such Series B Preferred Stock.
On
June 3, 2024, the Company issued 192,308 shares of restricted common stock to a third party consultant in consideration for professional
relations services and consulting services agreed to be rendered to the Company pursuant to the agreement, which has a term through May
23, 2025. Additional compensation payable pursuant to the terms of the agreement include $15,000 in cash per month, and $50,000 of shares
of common stock due after (a) the first six months and (b) first nine months of the term. All shares are earned upon issuance. The issuance
of the shares of common stock to the consultant were, and will be, exempt from registration pursuant to an exemption from registration
provided by Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”),
since the foregoing issuance did not/will not involve a public offering, the recipient took/will take the securities for investment and
not resale, we took/will take appropriate measures to restrict transfer, and the recipient is an “accredited investor”.
The securities are/will be subject to transfer restrictions, and the certificates or book-entry records evidencing the securities contain/will
contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or
sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such
securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities
Act and any applicable state securities laws.
On
the date of the Third Closing, the Company sold the Purchaser 750 shares of Series B Preferred Stock and the Warrants.
On
July 8, 2024, the Purchaser converted 135 shares of Series B Preferred Stock into 536,682 shares of Common Stock of the Company, pursuant
to the terms of such Series B Preferred Stock.
On
July 25 2024, the Purchaser converted 10 shares of Series B Preferred Stock into 33,670 shares of Common Stock of the Company, pursuant
to the terms of such Series B Preferred Stock.
On
March 25, 2025, a holder of Series B Preferred Stock converted 116 shares an aggregate stated value of $127,600), into 85,067 shares
of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion price
of $1.50 per share.
On
March 25, 2025, a holder of Series B Preferred Stock converted 350 shares (with an aggregate stated value of $385,000), into 256,667
shares of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion
price of $1.50 per share.
On
March 25, 2025, a holder of Series B Preferred Stock converted 146 shares (witan aggregate stated value of $160,600), into 107,067 shares
of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion price
of $1.50 per share.
On
March 26, 2025, a holder of Series B Preferred Stock converted 218 shares (with an aggregate stated value of $239,800), into 159,867
shares of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion
price of $1.50 per share.
On
March 28, 2025, a holder of Mangoceuticals, Inc.’s (the “Company’s” and “our”) Series
B Convertible Preferred Stock converted 260 shares of Series B Convertible Preferred Stock (with an aggregate stated value of $286,000),
into 190,667 shares of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the
current conversion price of $1.50 per share.
On
March 28, 2025, a holder of Series B Preferred Stock converted 74 shares (with an aggregate stated value of $81,400), into 54,267 shares
of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion price
of $1.50 per share.
On
March 28, 2025, a holder of Series B Preferred Stock converted 58 shares (with an aggregate stated value of $63,800), into 42,533 shares
of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion price
of $1.50 per share.
On
March 28, 2025, a holder of Series B Preferred Stock converted 350 shares (with an aggregate stated value of $385,000) into 256,666 shares
of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion price
of $1.50 per share.
On
April 2, 2025, MAAB Global Ltd. (“MAAB”), the holder of $500,000 of debt owed to MAAB from the Company, which amount was
previously owed to Barstool Sports Inc., and subsequently purchased by MAAB in January 2025, was converted into 333,333 shares of the
Company’s common stock, at a conversion price of $1.50 per share, pursuant to the terms of such debt, as amended on January 27,
2025.
On
April 11, 2025, the Company issued 100 shares of Series B Preferred Stock for a purchase price of $100,000.
On
April 28, 2025, a holder of Series B Preferred Stock converted 100 shares (with an aggregate stated value of $110,000), into 73,333 shares
of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion price
of $1.50 per share.
On
May 1, 2025, a holder of Series B Preferred Stock converted 100 shares (with an aggregate stated value of $330,000), into 220,000 shares
of common stock of the Company pursuant to the terms of such Series B Convertible Preferred Stock, including the current conversion price
of $1.50 per share.
On
May 5, 2025, the Company entered into a Compromise Settlement Agreement and Mutual Release (the “Settlement”) between the
Company, Jacob D. Cohen, and 1800 Diagonal Lending, LLC (“1800 Diagonal”). Pursuant to the Settlement and in consideration
for general releases of all parties, and the dismissal of a lawsuit with prejudice, pursuant to which 1800 Diagonal has made claims against
the Company and Mr. Cohen, the Company agreed to issue 1800 Diagonal 62,500 shares of restricted common stock of the Company. The Settlement
Agreement was entered into following a mediation between the parties.
For
all conversion of Series B Preferred Stock described above, we claim an exemption from registration provided by Section 3(a)(9) of the
Securities Act of 1933, as amended, for such issuances, as the securities were exchanged by us with our existing security holders in
a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.
All
issuances described above other than conversions of Series B Preferred Stock were exempt from registration pursuant to Section 4(a)(2),
and/or Rule 506 of Regulation D of the Securities Act, since the foregoing issuances did not involve a public offering, the recipients
took the securities for investment and not resale, we took take appropriate measures to restrict transfer, and the recipients were (a)
“accredited investors”; and/or (b) had access to similar documentation and information as would be required in a Registration
Statement under the Securities Act. The securities are subject to transfer restrictions, and the certificates evidencing the securities
contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or
sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such
securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities
Act and any applicable state securities laws.
Item
16. Exhibits and Financial Statement Schedules.
(a)
Exhibits.
The
following documents are filed as exhibits to this registration statement.
EXHIBIT INDEX
| |
|
|
|
Filed/ |
|
Incorporated
by Reference |
| Exhibit |
|
Description
of |
|
Furnished |
|
|
|
|
|
Filing |
|
File |
| Number |
|
Exhibit |
|
Herewith |
|
Form |
|
Exhibit |
|
Date |
|
Number |
| 3.1 |
|
Certificate
of Formation of Mangoceuticals, Inc., filed with the Secretary of State of Texas on October 7, 2021 |
|
|
|
S-1 |
|
3.1 |
|
1/13/2023 |
|
333-269240 |
| 3.2 |
|
Certificate
of Amendment to Certificate of Formation of Mangoceuticals, Inc., filed with the Secretary of State of Texas on April 15, 2022 |
|
|
|
S-1 |
|
3.2 |
|
1/13/2023 |
|
333-269240 |
| 3.3 |
|
Certificate
of Designations, Preferences and Rights of Series B Convertible Preferred Stock of Mangoceuticals, Inc., submitted to the Secretary
of State of Texas on March 28, 2024 |
|
|
|
10-K |
|
3.3 |
|
4/1/2024 |
|
001-41615 |
| 3.4 |
|
Certificate
of Correction to Certificate of Designations, Preferences and Rights of 6% Series C Convertible Preferred Stock of Mangoceuticals,
Inc., filed with the Secretary of State of Texas on April 29, 2024 |
|
|
|
8-K |
|
3.1 |
|
5/2/2024 |
|
001-41615 |
| 3.5 |
|
Amendment to Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock of Mangoceuticals, Inc., submitted to the Secretary of State of Texas on June 27, 2024 |
|
|
|
8-K |
|
3.2 |
|
7/2/2024 |
|
001-41615 |
| 3.6 |
|
Bylaws
of Mangoceuticals, Inc. |
|
|
|
S-1 |
|
3.3 |
|
1/13/2023 |
|
333-269240 |
| 3.7 |
|
Amendment to Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock of Mangoceuticals, Inc., submitted to the Secretary of State of Texas on March 17, 2025 |
|
|
|
8-K |
|
3.3 |
|
3/19/2025 |
|
001-41615 |
| 4.1 |
|
Common
Stock Purchase Warrant granted to Boustead Securities, LLC evidencing the right to acquire 87,500 shares of common stock (dated March
23, 2023) |
|
|
|
10-Q |
|
4.1 |
|
5/10/2023 |
|
001-41615 |
| 4.2 |
|
Form
of Common Stock Purchase Warrant (Investors - 2022 Private Placement) |
|
|
|
S-1 |
|
4.2 |
|
1/13/2023 |
|
333-269240 |
| 4.3 |
|
Common
Stock Purchase Warrant issued by Mangoceuticals, Inc. to Boustead Securities, LLC on December 19, 2023 |
|
|
|
8-K |
|
4.1 |
|
12/19/2023 |
|
001-41615 |
| 4.4 |
|
Common
Stock Purchase Warrant issued by Mangoceuticals, Inc. to Boustead Securities, LLC on January 22, 2024 |
|
|
|
8-K |
|
4.1 |
|
1/22/2024 |
|
001-41615 |
| 4.5 |
|
Common
Share Purchase Warrant dated April 4, 2024 (3,300,000 shares), granted to Platinum Point Capital LLC |
|
|
|
8-K |
|
4.1 |
|
4/11/2024 |
|
001-41615 |
| 4.6 |
|
Common
Share Purchase Warrant dated June 28, 2024 (500,000 shares), granted to Platinum Point Capital LLC |
|
|
|
8-K |
|
4.1 |
|
7/2/2024 |
|
001-41615 |
| 4.7 |
|
Common
Share Purchase Warrant dated June 28, 2024 (1,000,000 shares), granted to Platinum Point Capital LLC |
|
|
|
8-K |
|
4.2 |
|
7/2/2024 |
|
001-41615 |
| 5.1 |
|
Opinion of Lucosky Brookman LLP |
|
X |
|
|
|
|
|
|
|
|
| 10.1 |
|
Physician
Services Agreement dated August 1, 2022, between Mangoceuticals, Inc. and BrighterMD, LLC dba Doctegrity |
|
|
|
S-1 |
|
10.3£ |
|
1/13/2023 |
|
333-269240 |
| 10.2£ |
|
Master
Services Agreement and Statement of Work dated September 1, 2022, and effective August 31, 2022, between Epiq Scripts, LLC and Mangoceuticals,
Inc. |
|
|
|
S-1 |
|
10.4£ |
|
1/13/2023 |
|
333-269240 |
| 10.3# |
|
Executive
Employment Agreement dated August 31, 2022, between Mangoceuticals, Inc. and Jacob D. Cohen |
|
|
|
S-1 |
|
10.5# |
|
1/13/2023 |
|
333-269240 |
| 10.4# |
|
Mangoceuticals,
Inc. 2022 Equity Incentive Plan |
|
|
|
S-1 |
|
10.7# |
|
1/13/2023 |
|
333-269240 |
| 10.5# |
|
Stock
Option Agreement dated August 31, 2022 between Mangoceuticals, Inc. and Jacob D. Cohen (750,000 option shares) |
|
|
|
S-1 |
|
10.8# |
|
1/13/2023 |
|
333-269240 |
| 10.6# |
|
Stock
Option Agreement dated August 31, 2022 between Mangoceuticals, Inc. and Jonathan Arango (500,000 option shares) |
|
|
|
S-1 |
|
10.9# |
|
1/13/2023 |
|
333-269240 |
| 10.7# |
|
Offer
Letter dated October 1, 2022 entered into between Mangoceuticals, Inc. and Eugene M. Johnston |
|
|
|
S-1 |
|
10.15# |
|
1/13/2023 |
|
333-269240 |
| 10.8# |
|
Notice
of Restricted Stock Grant and Restricted Stock Grant Agreement dated October 1, 2022 between Mangoceuticals, Inc. and Eugene M. Johnston |
|
|
|
S-1 |
|
10.16# |
|
1/13/2023 |
|
333-269240 |
| 10.9# |
|
Notice
of Restricted Stock Grant and Restricted Stock Grant Agreement dated October 14, 2022 between Mangoceuticals, Inc. and Dr. Kenny
Myers |
|
|
|
S-1 |
|
10.17# |
|
1/13/2023 |
|
333-269240 |
| 10.10# |
|
October
14, 2022 Offer Letter entered into between Mangoceuticals, Inc. and Dr. Kenny Myers |
|
|
|
S-1 |
|
10.18# |
|
1/13/2023 |
|
333-269240 |
| 10.11# |
|
Notice
of Restricted Stock Grant and Restricted Stock Grant Agreement dated October 14, 2022 between Mangoceuticals, Inc. and Alex P. Hamilton |
|
|
|
S-1 |
|
10.19# |
|
1/13/2023 |
|
333-269240 |
| 10.12# |
|
October
14, 2022 Offer Letter entered into between Mangoceuticals, Inc. and Alex P. Hamilton |
|
|
|
S-1 |
|
10.20# |
|
1/13/2023 |
|
333-269240 |
| 10.13# |
|
Notice
of Restricted Stock Grant and Restricted Stock Grant Agreement dated October 14, 2022 between Mangoceuticals, Inc. and Lorraine D’Alessio |
|
|
|
S-1 |
|
10.21# |
|
1/13/2023 |
|
333-269240 |
| 10.14# |
|
October
14, 2022 Offer Letter entered into between Mangoceuticals, Inc. and Dr. Lorraine D’Alessio |
|
|
|
S-1 |
|
10.22# |
|
1/13/2023 |
|
333-269240 |
| 10.15# |
|
Consulting
Agreement dated January 24, 2023, between Mangoceuticals, Inc. and Sultan Haroon |
|
|
|
S-1/A |
|
10.31# |
|
1/26/2023 |
|
333-269240 |
| 10.16# |
|
Consulting
Agreement dated January 24, 2023, between Mangoceuticals, Inc. and John Helfrich |
|
|
|
S-1/A |
|
10.32# |
|
1/26/2023 |
|
333-269240 |
| 10.17# |
|
Consulting
Agreement dated January 24, 2023, between Mangoceuticals, Inc. and Justin Baker |
|
|
|
S-1/A |
|
10.33# |
|
1/26/2023 |
|
333-269240 |
| 10.18# |
|
Consulting
Agreement dated January 24, 2023, between Mangoceuticals, Inc. and Maja Matthews |
|
|
|
S-1/A |
|
10.34# |
|
1/26/2023 |
|
333-269240 |
| 10.19# |
|
Employment
Agreement dated and effective May 1, 2023, by and between Mangoceuticals, Inc. and Amanda Hammer |
|
|
|
8-K |
|
10.1 |
|
5/4/2023 |
|
001-41615 |
| 10.20# |
|
Stock
Option Agreement dated May 1, 2023 between Mangoceuticals, Inc. and Amanda Hammer (150,000 option shares) |
|
|
|
8-K |
|
10.2 |
|
5/4/2023 |
|
001-41615 |
| 10.21 |
|
Service
Agreement dated September 1, 2023, by and between Mangoceuticals, Inc. and Greentree Financial Group, Inc. |
|
|
|
8-K |
|
10.1 |
|
9/8/2023 |
|
001-41615 |
| 10.22£ |
|
Master
Services Agreement and Statement of Work dated September 1, 2022, and effective August 31, 2022, between Epiq Scripts, LLC and Mangoceuticals,
Inc. |
|
|
|
8-K |
|
10.2 |
|
9/21/2023 |
|
001-41615 |
| 10.23 |
|
First
Addendum to Master Services Agreement dated September 15, 2023, by and between Mangoceuticals, Inc. and Epiq Scripts, LLC |
|
|
|
8-K |
|
10.3 |
|
9/21/2023 |
|
001-41615 |
| 10.24# |
|
Consulting
Agreement dated and effective October 3, 2023, by and between Mangoceuticals, Inc. and Eugene M. Johnston |
|
|
|
8-K |
|
10.1 |
|
10/4/2023 |
|
001-41615 |
| 10.25# |
|
Advisor
Agreement dated November 1, 2023, between Mangoceuticals, Inc. and Dr. Douglas Christianson |
|
|
|
S-1 |
|
10.43 |
|
12/11/2023 |
|
333-275993 |
| 10.26# |
|
Notice
of Restricted Stock Grant and Restricted Stock Grant Agreement dated November 1, 2023 between Mangoceuticals, Inc. and Dr. Douglas
Christianson |
|
|
|
S-1 |
|
10.44 |
|
12/11/2023 |
|
333-275993 |
| 10.27 |
|
Marketing
Agreement dated December 10, 2023, by and between Mangoceuticals, Inc. and Marius Pharmaceuticals |
|
|
|
8-K |
|
10.1 |
|
12/11/2023 |
|
001-41615 |
| 10.28# |
|
Mangoceuticals,
Inc. 2022 Equity Incentive Plan Stock Option Agreement dated December 28, 2023 - Jacob Cohen - 1,250,000 shares |
|
|
|
8-K |
|
10.2 |
|
01/02/2024 |
|
001-41615 |
| 10.29# |
|
First
Amendment to the Mangoceuticals, Inc. 2022 Equity Incentive Plan |
|
|
|
8-K |
|
10.1 |
|
03/26/2024 |
|
001-41615 |
| 10.30# |
|
Amended
and Restated Mangoceuticals, Inc. 2022 Equity Incentive Plan |
|
|
|
8-K |
|
10.2 |
|
03/26/2024 |
|
001-41615 |
| 10.31 |
|
Securities
Purchase Agreement dated April 4, 2024, entered into between Mangoceuticals, Inc. and Platinum Point Capital LLC |
|
|
|
8-K |
|
10.1 |
|
4/11/2024 |
|
001-41615 |
| 10.32 |
|
Equity
Purchase Agreement dated April 4, 2024, entered into between Mangoceuticals, Inc. and Platinum Point Capital LLC |
|
|
|
8-K |
|
10.2 |
|
4/11/2024 |
|
001-41615 |
| 10.33 |
|
Registration
Rights Agreement (SPA), dated April 4, 2024, entered into between Mangoceuticals, Inc. and Platinum Point Capital LLC |
|
|
|
8-K |
|
10.3 |
|
4/11/2024 |
|
001-41615 |
| 10.34 |
|
Registration
Rights Agreement (ELOC), dated April 4, 2024, entered into between Mangoceuticals, Inc. and Platinum Point Capital LLC |
|
|
|
8-K |
|
10.4 |
|
4/11/2024 |
|
001-41615 |
| 10.35 |
|
Patent
Purchase Agreement dated April 24, 2024, by and between Mangoceuticals, Inc., as purchaser and Intramont Technologies, Inc., as seller |
|
|
|
8-K |
|
10.1 |
|
4/25/2024 |
|
001-41615 |
| 10.36 |
|
Omnibus
Amendment Agreement No. 1 dated June 27, 2024, entered into between Mangoceuticals, Inc. and Platinum Point Capital LLC |
|
|
|
8-K |
|
10.2 |
|
7/2/2024 |
|
001-41615 |
| 10.37 |
|
Master
Distribution Agreement dated July 2, 2024 and entered into on July 9, 2024, by and between Mangoceuticals, Inc. and ISFLST, Inc.
(ISFLST) |
|
|
|
8-K |
|
10.1 |
|
7/11/2024 |
|
001-41615 |
| 10.38 |
|
Second Amendment to the Mangoceuticals, Inc. 2022 Equity Incentive Plan |
|
|
|
8-K |
|
10.1 |
|
3/19/2025 |
|
001-41615 |
| 10.39 |
|
Master Distribution Agreement Navy Wharf Ltd. |
|
|
|
8-K |
|
10.1 |
|
3/25/2025 |
|
001-41615 |
| 10.40 |
|
Form of Securities Purchase Agreement April 11, 2025 |
|
|
|
8-K |
|
10.1 |
|
4/17/2025 |
|
001-41615 |
| 10.41 |
|
Promissory Note April 15, 2025 |
|
|
|
8-K |
|
10.2 |
|
4/17/2025 |
|
001-41615 |
| 10.42 |
|
Intellectual Property Purchase Agreement |
|
|
|
8-K |
|
10.1 |
|
4/25/2025 |
|
001-41615 |
| 10.43# |
|
Consulting Agreement of April 24, 2025 Strengthen Solutions |
|
|
|
8-K |
|
10.2 |
|
4/25/2025 |
|
001-41615 |
| 10.44# |
|
First Amendment to Amended and Restated Executive Employment Agreement Jacob Cohen |
|
|
|
8-K |
|
10.3 |
|
4/25/2025 |
|
001-41615 |
| 10.45 |
|
Mutual Rescission and Release Agreement dated May 22, 2025 and effective May 22, 2025, by and between Mangoceuticals, Inc. and ArcStone Securities and Investments Corp. |
|
|
|
8-K |
|
10.1 |
|
5/23/2025 |
|
001-41615 |
10.46 |
|
Mutual Rescission and Release Agreement dated May 22, 2025 and effective May 22, 2025, by and between Mangoceuticals, Inc. and Smokeless Technology Corp. |
|
|
|
8-K |
|
10.2 |
|
5/23/2025 |
|
001-41615 |
| 10.47 |
|
Mutual Rescission and Release Agreement dated May 22, 2025 and effective May 22, 2025, by and between Mangoceuticals, Inc. and Strategem Solutions Inc. |
|
|
|
8-K |
|
10.3 |
|
5/23/2025 |
|
001-41615 |
| 21.1 |
|
Subsidiaries |
|
|
|
10-K |
|
21.1 |
|
4/1/2024 |
|
001-41615 |
| 23.1 |
|
Consent of Turner, Stone & Company, L.L.P. |
|
X |
|
|
|
|
|
|
|
|
| 23.2 |
|
Consent of Lucosky Brookman LLP (included in Exhibit 5.1) |
|
X |
|
|
|
|
|
|
|
|
| 24.1 |
|
Power of Attorney (included on the signature page) |
|
X |
|
|
|
|
|
|
|
|
| 107 |
|
Filing Fee Table |
|
X |
|
|
|
|
|
|
|
|
#
Indicates management contract or compensatory plan or arrangement.
£
Certain portions of these Exhibits have been omitted in accordance with Regulation S-K Item 601 because they are both (i) not material
to investors and (ii) the type of information that the Registrant customarily and actually treats as private or confidential, and have
been marked with “[***]” to indicate where omissions have been made. The Registrant agrees to furnish supplementally an unredacted
copy of the Exhibit to the SEC upon its request.
Item
17. Undertakings.
| (a) |
The
undersigned registrant hereby undertakes: |
| |
(1) |
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To
include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| |
|
|
| |
(ii) |
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set
forth in the “Calculation of Registration Fee” table in the effective registration statement. |
| |
|
|
| |
(iii) |
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii), and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934. |
| |
(2) |
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| |
(3) |
To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of the offering. |
| |
(4) |
That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to
be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document immediately prior to such date of first use. |
| |
(5) |
That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities
to such purchaser: |
| |
(i) |
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424; |
| |
|
|
| |
(ii) |
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant; |
| |
|
|
| |
(iii) |
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and |
| |
|
|
| |
(iv) |
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (b) |
That,
insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue. |
| |
|
| (c) |
The
undersigned registrant hereby undertakes: |
| |
(1) |
That,
for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. |
| |
|
|
| |
(2) |
That,
for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time
it was declared effective. |
SIGNATURES
Pursuant
to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, Texas, on May 30, 2025.
| MANGOCEUTICALS,
INC. |
|
| |
|
| By: |
/s/
Jacob D. Cohen |
|
| Name: |
Jacob
D. Cohen |
|
| Title: |
Chairman
and Chief Executive Officer |
|
POWER
OF ATTORNEY
KNOW
ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Jacob D. Cohen and Eugene M.
Johnston, his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration
Statement, and to sign any registration statement for the same offering covered by the Registration Statement that is to be effective
upon filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the
same, with all exhibits thereto and all documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent
full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises,
as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent or his substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities
held on the dates indicated.
| NAME |
|
POSITION |
|
DATE |
| |
|
|
|
|
| /s/
Jacob D. Cohen |
|
Chairman
and Chief Executive Officer |
|
May
30, 2025 |
| Jacob
D. Cohen |
|
(Principal
Executive Officer) |
|
|
| |
|
|
|
|
| /s/
Eugene M. Johnston |
|
Chief
Financial Officer |
|
May
30, 2025 |
| Eugene
M. Johnston |
|
(Principal
Financial and Accounting Officer) |
|
|
| |
|
|
|
|
| /s/
Antonios “Tony” Isaac |
|
Director |
|
May
30, 2025 |
| Antonios
“Tony” Isaac |
|
|
|
|
| |
|
|
|
|
| /s/
Alex P. Hamilton |
|
Director |
|
May
30, 2025 |
| Alex
P. Hamilton |
|
|
|
|
| |
|
|
|
|
| /s/
Kenny Myers |
|
Director |
|
May
30, 2025 |
| Dr.
Kenny Myers |
|
|
|
|
| |
|
|
|
|
| /s/
Lorraine D’Alessio |
|
Director |
|
May
30, 2025 |
| Lorraine
D’Alessio |
|
|
|
|
Exhibit
5.1
 |
LUCOSKY
BROOKMAN LLP
101
Wood Avenue South
5th
Floor
Woodbridge,
NJ 08830
T
- (732) 395-4400
F-
(732) 395-4401
__________________ |
May
30, 2025
Mangoceuticals,
Inc.
15110
N. Dallas Parkway, Suite 600
Dallas,
Texas 75248
|
111
Broadway
Suite
807
New
York, NY 10006
T
- (212) 417-8160
F
- (212) 417-8161
__________________
www.lucbro.com |
| RE: |
Mangoceuticals,
Inc.’s Registration Statement on Form S-1 |
Ladies
and Gentlemen:
We
have acted as counsel to you, Mangoceuticals, Inc., a Texas corporation, (the “Company”) in connection with the Company’s
Registration Statement on Form S-1 filed with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities
Act of 1933, as amended (the “Securities Act”) on the date hereof (the “Registration Statement”), for a proposed
offering of: (i) 1,631,009 shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”),
consisting of (a) 550,000 shares of Common Stock issued upon conversion of 750 shares of the Company’s Series B Convertible Preferred
Stock (“Series B Preferred Stock”); (b) 376,009 shares of Common Stock issued to certain institutional accredited investors
(with 70,000 shares purchased at a price per share of $1.50; 70,454 shares purchased at a price per share of $1.65; 155,555 shares purchased
at a price per share of $2.25; and 80,000 shares purchased at a price per share of $2.50); (c) 100,000 shares of Common Stock issued
upon conversion of a $150,000 convertible promissory note dated December 13, 2024 and converted into shares of Common Stock on January
15, 2025 at a price per share of $1.50; and (d) 305,000 shares of Common Stock owned by Jacob Cohen, the Company’s Chief Executive
Officer; (ii) 1,960,709 shares of Common Stock (the “Warrant Shares”) issuable upon exercise of warrants (with 1,650,000
at an exercise price of $1.50 per share; 275,482 at an exercise price of $1.815 per share, and; 35,227 at an exercise price of $3.00
per share (the “Warrants”); (iii) 476,667 shares of Common Stock (the “Series B Shares”) issuable upon conversion
of 650 shares of Series B Preferred Stock with each share having a stated value of $1,100 and having a conversion price of $1.50 per
share; and (iv) 393,333 shares of Common Stock (the “Note Shares”) issuable upon conversion of the $500,000 Amended and Restated
Convertible Promissory Note dated May 27, 2025 with an effective date as of April 15, 2025 (the “Note”) with a fixed conversion
price of $1.50 per share.
This
opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
In
connection with this opinion, we have examined the originals or copies certified or otherwise identified to our satisfaction of the following:
(a) the Certificate of Formation and Bylaws of the Company, each as amended and/or restated as of the date hereof; (b) certain resolutions
of the Board of Directors of the Company related to the filing of the Registration Statement, the authorization and issuance of the Shares,
and related matters; (c) the Registration Statement and all exhibits thereto, (d) the Notes and Warrants; and (e) such other records,
documents and instruments as we deemed relevant and necessary for purposes of the opinion stated herein. In addition to the foregoing,
we also have relied as to matters of fact upon the representations made by the Company and its representatives and we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us certified or photostatic copies.
Based
upon the foregoing and in reliance thereon, and subject to the qualifications, limitations, exceptions and assumptions set forth herein,
we are of the opinion that:
| (i) |
the
Shares are validly issued, fully paid and non-assessable;
|
| (ii) |
the
Warrant Shares have been duly authorized by the Company, and when issued and delivered by the Company upon exercise of the Warrants
in accordance with the terms thereof, will be validly issued, fully paid and non-assessable; |
| |
|
| (iii) |
the
Series B Shares have been duly authorized by the Company, and when issued upon the conversion
of the Series B Preferred Stock pursuant to the terms and conditions of the Company’s
Certificate of Designation of Series B Preferred Stock and Certificate of Formation, will
be validly issued, fully paid and nonassessable; and
|
| (iv) |
the
Note Shares have been duly authorized by the Company, and when issued and delivered by the
Company upon the conversion of the Notes in accordance with the terms thereof, will be validly
issued, fully paid and non-assessable.
|
The
opinion expressed herein is limited to the laws of the State of Texas and the State of New York. This opinion letter is limited to the
laws in effect as of the date the Registration Statement is declared effective by the Commission and is provided exclusively in connection
with the public offering contemplated by the Registration Statement.
This
opinion letter is qualified to the extent that the enforceability of any applicable agreement, document, or instrument discussed herein
may be limited by or subject to bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar
laws relating to or affecting creditors’ rights generally, and general equitable or public policy principles.
This
opinion letter speaks only as of the date hereof and we assume no obligation to update or supplement this opinion letter if any applicable
laws change after the date of this opinion letter or if we become aware after the date of this opinion letter of any facts, whether existing
before or arising after the date hereof, that might change the opinions expressed above.
This
opinion letter is furnished in connection with the filing of the Registration Statement and may not be relied upon for any other purpose
without our prior written consent in each instance. Further, no portion of this letter may be quoted, circulated or referred to in any
other document for any other purpose without our prior written consent.
We
hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference of this firm under the
caption “Legal Matters” in the prospectus which is made part of the Registration Statement. In giving this consent, we do
not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission thereunder.
| |
Very truly yours, |
| |
|
| |
/s/ Lucosky Brookman LLP |
| |
Lucosky Brookman LLP |
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
hereby consent to the incorporation by reference in this Registration Statement (Form S-1) of Mangoceuticals, Inc., of our report dated
March 20, 2025 relating to the financial statements of Mangoceuticals, Inc.(the “Company”) as of and for the years ended
December 31, 2024 and 2023, which includes an explanatory paragraph relating to the Company’s ability to continue as a going concern,
and which forms part of this Registration Statement.
We
also consent to the reference to our firm under the heading “Experts” in such Registration Statement.
/s/
Turner, Stone & Company, L.L.P.
Dallas,
Texas
May
30, 2025
Exhibit
107
CALCULATION
OF REGISTRATION FEE
FORM
S-1
(Form
Type)
MANGOCEUTICALS,
Inc.
(Exact
Name of Registrant as Specified in its Charter)
Table
1: Newly Registered Securities
| | |
Security
Type | |
Security
Class
Title | |
Fee
Calculation
or Carry
Forward
Rule | |
Amount
Registered (1) | | |
Proposed
Maximum
Offering Price Per Share | | |
Maximum
Aggregate
Offering
Price | | |
Fee
Rate | | |
Amount of
Registration
Fee | |
| Fees to Be Paid | |
Equity | |
Common stock, par value $0.0001 per share | |
457(c) | |
| 1,631,009 | | |
| $1.83 (2) | | |
$ | 2,984,746.47 | | |
| 0.0001531 | | |
$ | 456.96 | |
| Fees to Be Paid | |
Equity | |
Common stock, par value $0.0001 per share, issuable upon the exercise of the warrants | |
457(c) | |
| 1,960,709 | | |
| $1.83 (2) | | |
$ | 3,588,097.47 | | |
| 0.0001531 | | |
$ | 549.34 | |
| Fees to Be Paid | |
Equity | |
Common stock, par value $0.0001 per share, issuable upon the conversion of the notes | |
457(c) | |
| 393,333 | | |
| $1.83 (2) | | |
$ | 719,799.39 | | |
| 0.0001531 | | |
$ | 110.20 | |
| Fees to Be Paid | |
Equity | |
Common stock, par value $0.0001 per share, issuable upon the conversion of preferred stock | |
457(c) | |
| 476,667 | | |
| $1.83 (2) | | |
$ | 872,300.61 | | |
| 0.0001531 | | |
$ | 133.55 | |
| | |
Total Offering Amounts | |
| 4,461,718 | | |
| | | |
$ | 8,164,943.94 | | |
| | | |
$ | 1,250.05 | |
| | |
Total Fees Previously Paid | |
| | | |
| | | |
| | | |
| | | |
| - | |
| | |
Total Fee Offsets | |
| | | |
| | | |
| | | |
| | | |
| - | |
| | |
Net Fee Due | |
| | | |
| | | |
| | | |
| | | |
$ | 1,250.05 | |
| (1) |
Consists
of 1,631,009 shares of Common Stock, 1,960,709 shares of Common Stock issuable upon the exercise of certain warrants of Mangoceuticals,
Inc. (the “Company”), 393,333 shares of Common Stock issuable upon the conversion of certain notes of the Company, and
476,667 shares of Common Stock issuable upon the conversion of certain preferred stock, being registered for resale from time to
time by selling securityholders named in this registration statement. Pursuant to Rule 416(a) promulgated under the U.S. Securities
Act of 1933, as amended (the “Securities Act”), there are also being registered an indeterminable number of additional
securities as may be issued to prevent dilution resulting from stock splits, stock dividends, or similar transactions. |
| |
|
| (2) |
Estimated
solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act, as amended, based
on the average of the high and low prices of the Company’s Common Stock reported on the Nasdaq Capital Market on May 27, 2025,
a date within five business days prior to the initial filing of the registration statement to which this exhibit is attached. |
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