Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 11, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-52684 | |
Entity Registrant Name | Progressive Care Inc. | |
Entity Central Index Key | 0001402945 | |
Entity Tax Identification Number | 32-0186005 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 400 Ansin Blvd. | |
Entity Address, Address Line Two | Suite A | |
Entity Address, City or Town | Hallandale Beach | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33009 | |
City Area Code | 305 | |
Local Phone Number | 760-2053 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 548,962,587 |
Condensed Conslidated Balance S
Condensed Conslidated Balance Sheets - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 2,387,540 | $ 1,412,108 |
Accounts receivable – trade, net | 1,545,127 | 2,187,848 |
Accounts receivable - other | 786,528 | 382,324 |
Inventory, net | 1,183,581 | 1,150,390 |
Prepaid expenses | 833,011 | 813,310 |
Total Current Assets | 6,735,787 | 5,945,980 |
Property and equipment, net | 2,389,377 | 2,423,497 |
Other Assets | ||
Goodwill | 1,387,860 | 1,387,860 |
Intangible assets, net | 154,606 | 152,791 |
Right of use assets, net | 637,872 | 682,946 |
Deposits | 38,637 | 38,637 |
Total Other Assets | 2,218,975 | 2,262,234 |
Total Assets | 11,344,139 | 10,631,711 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 6,653,700 | 6,000,034 |
Notes payable, net of unamortized debt discount and debt issuance costs - current portion | 163,937 | 202,184 |
Lease liabilities - current portion | 187,634 | 183,720 |
Total Current Liabilities | 7,005,271 | 6,385,938 |
Long-term Liabilities | ||
Notes payable and accrued interest, net of current portion | 3,523,596 | 3,108,794 |
Derivative liability | 1,175,000 | 221,900 |
Lease liabilities - net of current portion | 488,148 | 527,479 |
Total Liabilities | 12,192,015 | 10,244,111 |
Commitments and Contingencies | ||
Stockholders’ (Deficit) Equity | ||
Preferred Stock, Series A par value $0.001; 10,000,000 shares authorized, 51 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | ||
Common stock, par value $0.0001; 1,000,000,000 shares authorized, 548,962,587 and 544,865,492 issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 54,897 | 54,487 |
Additional paid-in capital | 8,987,640 | 8,862,050 |
Accumulated deficit | (9,890,413) | (8,528,937) |
Total Stockholders’ (Deficit) Equity | (847,876) | 387,600 |
Total Liabilities and Stockholders’ (Deficit) Equity | $ 11,344,139 | $ 10,631,711 |
Condensed Conslidated Balance_2
Condensed Conslidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 548,962,587 | 544,865,492 |
Common stock, shares outstanding | 548,962,587 | 544,865,492 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 51 | 51 |
Preferred stock, shares outstanding | 51 | 51 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues, net | $ 10,050,995 | $ 9,604,464 |
Cost of revenue | 7,670,390 | 7,173,075 |
Gross profit | 2,380,605 | 2,431,389 |
Selling, general and administrative expenses | ||
Bad debt (recovery) expense | (37,800) | 14,400 |
Share-based compensation | 30,000 | 75,000 |
Other selling, general and administrative expenses | 2,523,962 | 2,985,665 |
Total selling, general and administrative expenses | 2,516,162 | 3,075,065 |
Loss from operations | (135,557) | (643,676) |
Other income (loss) | ||
Change in fair value of derivative liability | (953,100) | 426,680 |
Gain on debt extinguishment | 175,000 | 570,746 |
Gain on disposal of fixed assets | 11,562 | |
Interest expense | (459,381) | (321,789) |
Total other income (loss) | (1,225,919) | 675,637 |
(Loss) income before provision for income taxes | (1,361,476) | 31,961 |
Provision for income taxes | (5,109) | |
Net (loss) income | $ (1,361,476) | $ 26,852 |
Basic and diluted net (loss) income per common share | ||
Weighted average number of common shares outstanding during the period – basic | 545,477,319 | 501,336,703 |
Weighted average number of common shares outstanding during the period – diluted | 545,477,319 | 523,951,587 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders (Deficit) Equity (Unaudited) - USD ($) | Preferred Stock [Member]Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 48,577 | $ 6,978,301 | $ (8,746,930) | $ (1,720,052) | |
Beginning balance, shares at Dec. 31, 2020 | 51 | 485,768,076 | |||
Issuance of common stock for services rendered | $ 199 | 74,801 | 75,000 | ||
Issuance of common stock for services rendered, shares | 1,989,390 | ||||
Net income (loss) | 26,852 | 26,852 | |||
Issuance of common stock for settlement of debt principal and interest | $ 3,223 | 1,038,756 | 1,041,979 | ||
Issuance of common stock for settlement of debt principal and interest, shares | 32,231,321 | ||||
Ending balance, value at Mar. 31, 2021 | $ 51,999 | 8,091,858 | (8,720,078) | (576,221) | |
Ending balance, shares at Mar. 31, 2021 | 51 | 519,988,787 | |||
Beginning balance, value at Dec. 31, 2021 | $ 54,487 | 8,862,050 | (8,528,937) | 387,600 | |
Beginning balance, shares at Dec. 31, 2021 | 51 | 544,865,492 | |||
Issuance of common stock for services rendered | $ 62 | 20,938 | 21,000 | ||
Issuance of common stock for services rendered, shares | 618,672 | ||||
Stock-based compensation | $ 348 | 104,652 | 105,000 | ||
Stock-based compensation, shares | 3,478,423 | ||||
Net income (loss) | (1,361,476) | (1,361,476) | |||
Ending balance, value at Mar. 31, 2022 | $ 54,897 | $ 8,987,640 | $ (9,890,413) | $ (847,876) | |
Ending balance, shares at Mar. 31, 2022 | 51 | 548,962,587 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flows from Operating Activities: | ||
Net (loss) income | $ (1,361,476) | $ 26,852 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation | 34,120 | 43,935 |
Change in provision for doubtful accounts | (37,800) | 14,400 |
Share-based compensation | 126,000 | 75,000 |
Amortization of debt issuance costs and debt discounts | 285,870 | 224,130 |
Gain from debt settlement | (570,746) | |
Amortization of right of use assets-Finance leases | 8,336 | 8,336 |
Amortization of right of use assets-Operating leases | 36,738 | 44,730 |
Change in fair value of derivative liability | 953,100 | (426,680) |
Change in accrued interest on notes payable | 155,268 | 75,767 |
Change in accrued interest on lease liabilities | 4,462 | 5,503 |
Amortization of intangible assets | 8,185 | 87,008 |
Gain on disposal of fixed assets | (11,562) | |
Decrease (Increase) in: | ||
Accounts receivable | 276,317 | (576,186) |
Inventory | (33,191) | 124,529 |
Prepaid expenses | (19,701) | 85,153 |
Deposits | (2,236) | |
Increase (decrease) in: | ||
Accounts payable and accrued liabilities | 598,398 | 860,021 |
Operating lease liabilities | (30,260) | (49,853) |
Net cash provided by operating activities | 992,804 | 49,663 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (99,115) | |
Proceeds from disposal of fixed assets | 11,562 | |
Purchase of intangibles assets | (10,000) | (12,659) |
Net Cash Provided by (Used in) Investing Activities | 1,562 | (111,774) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of notes payable | 421,400 | |
Payments of notes payable | (9,315) | (40,791) |
Payments on lease liabilities | (9,619) | (15,286) |
Net Cash (Used in) Provided by Financing Activities | (18,934) | 365,323 |
Net increase in cash and cash equivalents | 975,432 | 303,212 |
Cash and cash equivalents at beginning of period | 1,412,108 | 2,100,695 |
Cash and cash equivalents at end of period | 2,387,540 | 2,403,907 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 18,242 | 21,892 |
Cash paid for income taxes | 5,109 | |
Supplemental Schedule of non-cash investing and financing activities: | ||
Debt principal and interest repaid through conversion into common stock shares | 1,041,979 | |
Debt extension fee added to note principal | 100,000 | |
Issuance of common stock for services rendered | $ 21,000 | $ 75,000 |
Organization & Nature of Operat
Organization & Nature of Operations | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization & Nature of Operations | Note 1 Organization & Nature of Operations Progressive Care Inc. (“Progressive”) was incorporated under the laws of the state of Delaware on October 31, 2006. Progressive, through its wholly-owned subsidiaries, PharmCo, LLC (referred to as “PharmCo 901”), Touchpoint RX, LLC doing business as PharmCo Rx 1002, LLC (referred to as “PharmCo 1002”), Family Physicians RX, Inc. doing business as PharmCoRx 1103 and PharmCoRx 1204 (referred to as “FPRX” historically or “PharmCo 1103” and “PharmCo 1204” currently) (pharmacy subsidiaries collectively referred to as “PharmCo”), and ClearMetrX Inc. (collectively with all entities referred to as the “Company”, or “we”) is a personalized healthcare services and technology company that provides prescription pharmaceuticals and risk and data management services to healthcare organizations and providers. PharmCo 901 was formed on November 29, 2005 as a Florida Limited Liability Company and is a 100 PharmCo 1103 is a pharmacy with locations in North Miami Beach and Orlando, Florida that provides PharmCo’s pharmacy services to Broward County, the Orlando/Tampa corridor, and the Treasure Coast of Florida. Progressive acquired all of the ownership interests in PharmCo 1103 in a purchase agreement entered into on June 1, 2019. PharmCo 1002 is a pharmacy located in Palm Springs, Florida that provides PharmCo’s pharmacy services to Palm Beach, St. Lucie and Martin Counties, Florida. Progressive acquired all of the ownership interests in PharmCo 1002 in a purchase agreement entered into on July 1, 2018. ClearMetrX was formed on June 10, 2020 and provides third party administration services to 340B covered entities. ClearMetrX also provides data analytics and reporting services to support and improve care management for health care organizations. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 2 Basis of Presentation The Company’s fiscal year end is December 31. The Company uses the accrual method of accounting. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. The December 31, 2021 balance sheet has been derived from audited consolidated financial statements. The accompanying unaudited condensed consolidated financial statements for the three months ended March 31, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited financial information included in this report includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of the full fiscal year. The condensed consolidated financial statements included in this report should be read in conjunction with the financial statements and notes thereto included in the Company’s financial statements for the fiscal year ended December 31, 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 Summary of Significant Accounting Policies Principles of Consolidation The condensed consolidated financial statements include the accounts of Progressive and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventories, estimated useful lives and potential impairment of property and equipment, estimated fair value of derivative liabilities using the Monte Carlo simulation model, fair value of assets acquired and liabilities assumed in business combinations, and estimates of current and deferred tax assets and liabilities. Making estimates requires management to exercise significant judgment. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including sales, expenses, and reserves and allowances, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, and national customers and markets. We have made estimates of the impact of COVID-19 within our condensed consolidated financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates. Reclassifications Certain reclassifications have been made to the 2021 financial statement presentation to conform to that of the current period. Total equity and net income are unchanged due to these reclassifications. Cash and Cash Equivalents The Company maintains its cash and cash equivalents in bank deposit accounts which, at times, may exceed federally insured limits. The Company had $ 1,250,375 Cash Equivalents: The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of March 31, 2022 and December 31, 2021, the Company’s cash equivalents consist of a money market account. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at the invoiced amount. Trade accounts receivable primarily include amounts from third-party pharmacy benefit managers and insurance providers and are based on contracted prices. Trade accounts receivable are unsecured and require no collateral. The Company records an allowance for doubtful accounts for estimated differences between the expected and actual payment of accounts receivable. These reductions were made based upon reasonable and reliable estimates that were determined by reference to historical experience, contractual terms, and current conditions. Each quarter, the Company reevaluates its estimates to assess the adequacy of its allowance and adjusts the amounts as necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Risks and Uncertainties The Company’s operations are subject to intense competition, risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business failure. Billing Concentrations The Company’s trade receivables are primarily from prescription medications billed to various insurance providers. Ultimately, the insured is responsible for payment should the insurance company not reimburse the Company. The Company generated reimbursements from three significant insurance providers for the period ended March 31, 2022: Schedule of Billing Concentrations Payors A 35 % B 29 % C 20 % Reimbursement percentage The Company generated reimbursements from three significant pharmacy benefit managers (PBMs) for the period ended March 31, 2022: PBMs A 57 % B 35 % C 5 % Inventory Inventory is valued on a lower of first-in, first-out (FIFO) cost or net realizable value basis. Inventory primarily consists of prescription medications, pharmacy and testing supplies, and retail items. The Company provides a valuation allowance for obsolescence and slow-moving items. The Company recorded an allowance for obsolescence of $ 40,000 Property and Equipment Property and equipment are recorded at cost or fair value if acquired as part of a business combination. Property and equipment are depreciated or amortized using the straight-line method over their estimated useful lives. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded, when appropriate. Expenditures for maintenance and repairs are charged to expense as incurred. Estimated useful lives of property and equipment are as follows: Schedule of Estimated Useful Lives of Property and Equipment Description Estimated Useful Life Building 40 Leasehold improvements and fixtures Lesser of estimated useful life or life of lease Furniture and equipment 5 Computer equipment and software 3 Vehicles 3 5 Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges during the periods ended March 31, 2022 and 2021, respectively. Business acquisitions The Company records business acquisitions using the acquisition method of accounting. All of the assets acquired, liabilities assumed, and contractual contingencies are recognized at their fair value on the acquisition date. The application of the acquisition method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets that are depreciated and amortized and goodwill. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses and restructuring costs are recognized separately from the business combination and are expensed as incurred. Goodwill Goodwill represents the excess of the purchase price of FPRX and PharmCo 1002 over the value assigned to their net tangible and identifiable intangible assets. FPRX and PharmCo 1002 are considered to be the reporting units for goodwill. Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. Valuation techniques consistent with the market approach, income approach, and/or cost approach are used to measure fair value. Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and in interim periods if events or changes in circumstances indicate that the assets may be impaired. Intangible Assets Amortizing identifiable intangible assets generally represent the cost of client relationships and tradenames acquired, as well as non-compete agreements to which the Company is a party. In valuing these assets, the Company makes assumptions regarding useful lives and projected growth rates, and significant judgment is required. The Company periodically reviews its identifiable intangible assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of those assets exceed their respective fair values, additional impairment tests are performed to measure the amount of the impairment losses, if any. Fair Value Measurements Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 820 establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities (both common stock and preferred stock) that are traded in an active exchange market, as well as U.S. Treasury securities. Level 2: Unadjusted observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. This category generally includes certain U.S. Government, agency mortgage-backed debt securities, non-agency structured securities, corporate debt securities and preferred stocks. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. The following tables presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of: Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis Description Level 1 Level 2 Level 3 Balance at March 31, 2022 Derivative Liabilities $ - $ - $ 1,175,000 $ 1,175,000 Description Level 1 Level 2 Level 3 Balance at December 31, 2021 Derivative Liabilities $ - $ - $ 221,900 $ 221,900 The following table is a roll forward from December 31, 2021 to March 31, 2022 of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Schedule Fair Value Assets and Liabilities Recurring Basis Using Significant Unobservable Inputs Level 3 Derivative Liabilities Opening balance December 31, 2021 $ 221,900 Transfers into (out of) Level 3 Total (gains) or losses for the period Included in net (loss) income for the period 953,100 Closing balance March 31, 2022 $ 1,175,000 Change in fair value of derivative for the three months ended March 31, 2022 was included in net loss for the period. Fair Value of Financial Instruments The Company’s financial instruments consisted of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, lease liabilities, and notes payable. The carrying amounts of the Company’s financial instruments other than notes payable and lease liabilities generally approximate their fair values at March 31, 2022 and December 31, 2021 due to the short-term nature of these instruments. The carrying amount of notes payable approximated fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing. The carrying value of lease liabilities approximate fair value due to the implicit rate in the lease in relation to the Company’s borrowing rate and the duration of the leases. Derivative Liabilities U.S. GAAP requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and their measurement at fair value. In assessing the convertible debt instruments, management determines if the conversion feature requires bifurcation from the host instrument and recording of the bifurcated derivative instrument at fair value. Once derivative liabilities are determined, they are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value is recorded in results of operations as an adjustment to fair value of derivatives. The fair value of these derivative instruments is determined using the Monte Carlo Simulation Model. Revenue Recognition The Company recognizes pharmacy revenue from dispensing prescription drugs at the time the drugs are physically delivered to a customer or when a customer picks up their prescription or purchases merchandise at the store, which is the point in time when control transfers to the customer. Each prescription claim is considered an arrangement with the customer and is a separate performance obligation. Payments are received directly from the customer at the point of sale, or the customers’ insurance provider is billed electronically. For third party medical insurance and other claims, authorization to ensure payment is obtained from the customer’s insurance provider before the medication is dispensed to the customer. Authorization is obtained for these sales electronically and a corresponding authorization number is issued by the customers’ insurance provider. The Company recognizes testing revenue when the tests are performed, and results are delivered to the customer. Each test is considered an arrangement with the customer and is a separate performance obligation. Payment is generally received in advance from the customer. Billings for most prescription orders are with third-party payers, including Medicare, Medicaid, and insurance carriers. Customer returns are nominal. Prescription revenues exceeded 86 % of total revenue for the three months ended March 31, 2022 and 2021, respectively. The Company accrues an estimate of fees, including direct and indirect remuneration fees (“DIR fees”), which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of revenue at the time revenue is recognized. Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known. The following table disaggregates net revenue by categories for the three months ended March 31: Schedule of Disaggregates Net Revenue by Categories 2022 2021 Prescription revenue $ 8,605,882 $ 8,631,048 340B contract revenue 387,956 724,498 Testing revenue 1,291,017 553,274 Rent and other revenue 207 5 Subtotal 10,285,062 9,908,825 PBM fees (234,067 ) (304,237 ) Sales returns - (124 ) Revenues, net $ 10,050,995 $ 9,604,464 Cost of Revenue Cost of pharmacy revenue is derived based upon vendor purchases relating to prescriptions sold, cost of testing supplies for tests administered to patients, and point-of-sale scanning information for non-prescription sales and is adjusted based on periodic inventories. All other costs related to revenues are expensed as incurred. DIR Fees The Company reports Direct and Indirect Remuneration (“DIR”) fees as a reduction of revenue on the accompanying Condensed Consolidated Statements of Operations. DIR Fees are fees charged by Pharmacy Benefit Managers (“PBMs”) to pharmacies for network participation as well as periodic reimbursement reconciliations. For some PBMs, DIR fees are charged at the time of the settlement of a pharmacy claim. Other PBMs do not determine DIR fees at the claim settlement date, and therefore DIR fees are collected from pharmacies after claim settlement, often as clawbacks of reimbursements based on factors that vary from plan to plan. For example, two PBMs calculate DIR fees on a trimester basis and charge the Company for these fees as reductions of reimbursements paid to the Company 2-3 months after the end of the trimester (e.g., DIR fees for January – April 2021 claims were charged by these PBMs in July – August 2021). For DIR fees that are not collected at the time of claim settlement, the Company records an accrued liability at each reporting date for estimated DIR fees that are expected to be collected by the PBMs in a future period. The estimated liability for these fees is highly subjective and the actual amount collected may differ from the accrued liability. The uncertainty of management’s estimates is due to inadequate disclosure to the Company by the PBMs as to exactly how these fees are calculated either at the time the DIR fees are actually assessed and reported to the Company. The detail level of the disclosure of assessed DIR fees varies based on the information provided by the PBM. Vendor Concentrations For the three months ended March 31, 2022 and 2021, the Company had significant vendor concentrations with one vendor. The purchases from this significant vendor were 98 94 Selling, General and Administrative Expenses Selling expenses primarily consist of store salaries, contract labor, occupancy costs, and expenses directly related to the stores. General and administrative costs include advertising, insurance, professional fees, and depreciation and amortization. Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Advertising expense was $ 97,990 59,311 Share-Based Payment Arrangements Generally, all forms of share-based payments, including warrants, are measured at their fair value on the awards’ grant date typically using a Black-Scholes pricing model, based on the estimated number of awards that are ultimately expected to vest. The costs associated with share-based compensation awards to employees and non-employee directors are measured at the grant date based on the calculated fair value of the award and recognized as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The shares are subsequently re-measured at their fair value at each reporting date over the service period of the awards. The expense resulting from share-based payments is recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Progressive Care Inc., RXMD Therapeutics and PharmCoRx 1103 are taxed as C corporations. PharmCo 901 and PharmCo 1002 are taxed as partnerships, wherein each member is responsible for the tax liability, if any, related to its proportionate share of PharmCo 901 and PharmCo 1002’s taxable income. Progressive Care Inc. has a 100 The provision for income taxes for the three months ended March 31, 2021 on the Condensed Consolidated Statements of Operations represents the minimum state corporate tax payments. There was no current tax provision for the three months ended March 31, 2022 and 2021 because the Company did not have taxable income during those periods. Total available net operating losses to be carried forward to future taxable years was approximately $ 11.6 million as of March 31, 2022, $ 6 million of which will expire in various years through 2038 . The temporary differences giving rise to deferred income taxes principally relate to accelerated depreciation on property and equipment and amortization of goodwill recorded for tax purposes, reserves for estimated doubtful accounts and inventory obsolescence and net operating losses recorded for financial reporting purposes. The Company’s net deferred tax asset at March 31, 2022 and December 31, 2021 was fully offset by a 100 % valuation allowance as it was not more likely than not that the tax benefits of the net deferred tax asset would be realized. The change in the valuation allowance decreased by approximately $ 20,000 for the period ended March 31, 2022. The Company accounts for uncertainty in income taxes by recognizing a tax position in the condensed consolidated financial statements only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company records interest and penalties related to tax uncertainties, if any, as income tax expense. Based on management’s evaluation, the Company does not believe it has any uncertain tax positions for the three months ended March 31, 2022 and 2021. (Loss) Income per Share Basic (loss) income per share (“EPS”) is computed by dividing net (loss) income available to common shareholders by the weighted average number of common shares outstanding during the, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock warrants), and convertible debt, using the if converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. Paycheck Protection Program Loan The Company records Paycheck Protection Program (“PPP”) loan proceeds in accordance with Accounting Standards Codification (“ASC”) 470, Debt. The Company treats the PPP loan as indebtedness, which is extinguished and recorded as a gain on debt extinguishment when legally released by the primary obligor. Recently Adopted Accounting Standards Debt In August 2020, the FASB issued 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which among other things, simplifies the accounting models for the allocation of proceeds attributable to the issuance of a convertible debt instrument. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (i) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (ii) a convertible debt instrument was issued at a substantial premium. The standard became effective for the Company in the first quarter of 2022 and did not have a material effect on the Company’s condensed consolidated financial statements. Accounting Pronouncements Issued but not yet Adopted Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)—simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is required to be adopted for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this guidance on the Company’s condensed consolidated financial statements. Credit Losses In June 2016, the FASB issued ASU 2016-13, “Current Expected Credit Losses” (“ASU 2016-13”), which introduces an impairment model based on expected, rather than incurred, losses. Additionally, it requires expanded disclosures regarding (a) credit risk inherent in a portfolio and how management monitors the portfolio’s credit quality; (b) management’s estimate of expected credit losses; and (c) changes in estimates of expected credit losses that have taken place during the period. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022. The Company has not yet quantified the impact of ASU 2016-13 on its condensed consolidated financial statements. However, it is not expected to have a material effect on the Company’s condensed consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company’s condensed consolidated financial statements. Subsequent Events Management has evaluated subsequent events and transactions for potential recognition or disclosure in the condensed consolidated financial statements through May 16, 2022, the date the condensed consolidated financial statements were available to be issued. |
Liquidity and Going Concern Con
Liquidity and Going Concern Consideration | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern Consideration | Note 4. Liquidity and Going Concern Consideration The Company has sustained recurring operating losses and negative cash flows from operations over the past years. As of March 31, 2022, the Company had an accumulated deficit of $ 9.9 1.4 0.1 million , and net cash provided by operating activities of $ 1.0 million . The Company’s cash and cash equivalent position was $ 2.4 During the first quarter of 2022, the Company extended the maturity date of the Iliad Research convertible note and accrued interest of $ 2,298,803 to May 15, 2023. The note payable and accrued interest can be settled by Iliad Research either through a cash payment or conversion into shares of the Company’s common stock. Although the note holder has tendered past redemptions of the Iliad note payable in the form of common stock conversions, there are no assurances that the note holder will convert the remaining balance of the note and accrued interest into shares of the Company’s common stock. Over the past years, the Company’s growth has been funded through a combination of bank debt and lease financing. The Company believes that it has sufficient cash balances, positive cash flows from operations, and financing commitments to meet its obligations for the next 12 months. The attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill the Company’s growth and operating activities and generating a level of revenues adequate to support the Company’s cost structure. The Company expects that it will need to raise substantial additional capital to accomplish its business plan over the next several years. In addition, the Company may wish to selectively pursue possible acquisitions of businesses, technologies, or service lines complementary to those of the Company in the future in order to expand its presence in the marketplace and achieve operating efficiencies. |
Accounts Receivable _ Trade, ne
Accounts Receivable – Trade, net | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable – Trade, net | Note 5. Accounts Receivable – Trade, net Accounts receivable consisted of the following at: Schedule of Accounts Receivable March 31, 2022 December 31, 2021 Gross accounts receivable - trade $ 1,714,527 $ 2,395,048 Less: Allowance for doubtful accounts (169,400 ) (207,200 ) Accounts receivable – trade, net $ 1,545,127 $ 2,187,848 For the three months ended March 31, 2022 and 2021, the Company recognized bad debt (recovery) expense in the amount of ($37,800) 14,400 |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Note 6. Property and Equipment, net Property and equipment, net consisted of the following at: Schedule of Property And Equipment, Net March 31, 2022 December 31, 2021 Building $ 1,651,069 $ 1,651,069 Building improvements 507,238 507,238 Land 184,000 184,000 Leasehold improvements and fixtures 276,614 276,614 Furniture and equipment 330,291 330,291 Computer equipment and software 101,230 101,230 Vehicles 81,633 81,633 Total 3,132,075 3,132,075 Less: accumulated depreciation and amortization (742,698 ) (708,578 ) Property and equipment, net $ 2,389,377 $ 2,423,497 Depreciation expense for the three months ended March 31, 2022 and 2021 was $ 42,456 52,271 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 7. Intangible Assets Intangible assets consisted of the following at: Schedule of Intangible Assets March 31, December 31, 2022 2021 Trade names $ 362,000 $ 362,000 Pharmacy records 263,000 263,000 Non-compete agreements 166,000 166,000 Website 67,933 67,933 Subtotal 858,933 858,933 Less accumulated amortization (790,751 ) (782,566 ) Net intangible assets $ 68,182 $ 76,367 Software not in service 86,424 76,424 Total Intangible Assets, net $ 154,606 $ 152,791 Amortization of intangible assets amounted to $ 8,185 87,008 Schedule of Estimated Amortization Expense for Intangible Assets Year Amount 2022 (nine months) 23,624 2023 31,452 2024 13,106 Total $ 68,182 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 8. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following at: Schedule of Accounts Payable and Accrued Liabilities March 31, December 31, 2022 2021 Accounts payable and accrued liabilities consisted of the following: Accounts payable - trade $ 5,145,984 $ 4,677,555 Accrued payroll and payroll taxes 186,563 143,074 Accrued DIR fees 774,904 712,002 Accrued legal fees 306,588 306,588 Other accrued liabilities 239,661 160,815 Totals $ 6,653,700 $ 6,000,034 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 9. Notes Payable Notes payable consisted of the following at: Schedule of Notes Payable March 31, December 31, 2022 2021 A. Convertible notes payable and accrued interest - collateralized $ 2,298,803 $ 2,143,891 B. Mortgage note payable – commercial bank - collateralized 1,287,311 1,307,562 C. Note payable – uncollateralized 25,000 25,000 D. Note payable - collateralized 45,989 52,231 Insurance premium financing 30,430 68,164 Subtotal 3,687,533 3,596,848 Less Unamortized debt discount - (198,677 ) Less Unamortized debt issuance costs - (575 ) Less Unamortized investment length premium - (86,618 ) Total 3,687,533 3,310,978 Less: Current portion of notes payable (163,937 ) (202,184 ) Long-term portion of notes payable $ 3,523,596 $ 3,108,794 The corresponding notes payable above are more fully discussed below: (A) Convertible Notes Payable – collateralized Iliad Research and Trading, L.P. On March 6, 2019, Progressive entered a Securities Purchase Agreement (the “Purchase Agreement”) with Iliad Research and Trading, L.P. (“Iliad Research”), a Utah limited partnership, in the amount of $ 3,310,000 , which included a $ 300,000 Original Issue Discount (“OID”) and $ 10,000 in debt issuance costs for the transaction (“the Iliad Research note”). The Iliad Research note is comprised of two tranches consisting of an initial tranche in the amount of $ 2,425,000 and a second tranche in the amount of $ 885,000 . The initial tranche consisted of the initial cash purchase price of $ 2,425,000 , $ 115,000 of the OID and the debt issuance costs of $ 10,000 . The remaining OID of $ 185,000 was allocated to the second tranche. The Iliad Research note is convertible into shares of common stock ($ 0.0001 par value per share) in 1 year at the average of the two lowest closing trading prices during the twenty trading days immediately preceding the applicable conversion. The original Iliad Research note maturity date was April 15, 2022 . In March 2022, the Company elected to extend the Iliad Research note to May 15, 2022 (“the Maturity Date”) and obtained the right to further extend the maturity date of the Iliad Research note to May 15, 2023. The Iliad Research note accrues interest at the rate of 10 % per annum and the entire unpaid principal balance plus all accrued and unpaid interest are due on the Maturity Date. An investment length premium in the amount of $ 168,619 136,486 117,619 5 The Iliad Research note includes a provision that limits the volume of sales of common stock shares received by Iliad Research from note conversions (“Conversion Shares”). Iliad Research agreed that, with respect to the sale of Conversion Shares, in any given calendar week its net sales of Conversion Shares shall not exceed the greater of (i) ten percent (10%) of Progressive’s Common Stock dollar trading volume (the “Trading Volume”) in such week (which, for purposes hereof, means the number of shares traded during such calendar week multiplied by the volume weighted average price per share for such week), and (ii) $100,000.00 (the “Volume Limitation”); provided; however, that if Lender’s Net Sales are less than the Volume Limitation for any given week, then in the following week (or two (2) weeks in the case of any week where the Closing Trade Price on any given day during that week is 25% greater than the previous week’s VWAP) Lender shall be allowed to sell an additional amount of Conversion Shares equal to the difference between the amount Lender was allowed to sell and the amount Lender actually sold. In the event Iliad Research breaches the Volume Limitation where its Net Sales of Conversion Shares during any calendar week exceed the dollar volume it is permitted to sell during such week pursuant to the Volume Limitation (such excess, the “Excess Sales”), then in such event Progressive shall be entitled to reduce the Outstanding Balance of the Iliad Research note by an amount equal to such Excess Sales upon delivery of written notice to Iliad Research setting forth its basis for such reduction (the “Outstanding Balance Reduction”). The volume of Conversion Shares sales exceeded the Volume Limitation in June 2021, which resulted in Excess Sales of $ 180,000 and a corresponding Outstanding Balance Reduction in the Iliad Research note carrying value of $ 180,000 as of December 31, 2021. The Company reported the Outstanding Balance Reduction as a Gain on Debt Extinguishment in the amount of $ 180,000 on the Company’s Consolidated Statements of Operations for the year ended December 31, 2021. Progressive Care filed a demand (“the Company Demand”) with Iliad Research on December 14, 2021, that alleged breaches of the volume limitation provisions of the Iliad Research note, as well as a previous note agreement with an affiliate of Iliad Research, Chicago Venture Partners, LP (“CVP”), (“the CVP note”). The CVP Note had previously been paid off in 2020. On January 7, 2022, in response to the Company Demand, Iliad Research and CVP filed a complaint with the Third Judicial District Court of Salt Lake County, State of Utah, as well as an Arbitration Notice pursuant to the CVP and Iliad Research Purchase Agreements. On January 20, 2022, Progressive Care entered into an agreement with Iliad Research and CVP (“the Settlement Agreement”) wherein the investors agreed to resolve various demands and complaints related to the note agreements with the two investors. In the Settlement Agreement, the parties agreed to the following: 1. The Maturity Date of the Iliad Research Note was extended to April 15, 2022. Progressive Care also was granted the right to extend the Maturity Date for an additional month to May 15, 2022 at its election by providing written notice of such election to Iliad Research. In the event Progressive Care elects to extend the Maturity Date to May 15, 2022, then the outstanding balance of the Iliad Research Note will increase by two percent ( 2 %). 2. Iliad Research and any entity affiliated with Iliad Research agreed not to sell any shares of Progressive Care common stock for the period (“the Standstill Period”) beginning on January 20, 2022 (“the Effective Date” of the Settlement Agreement) and ending on the Maturity Date of the Iliad Research Note, as amended by the Settlement Agreement. In addition, Iliad Research agreed not to submit any Redemption Notices under the Iliad Research Note during the Standstill Period, so long as no event of default occurs under the Iliad Research Note. 3. CVP agreed to pay $ 175,000 via wire transfer within two (2) business days of the Effective Date as settlement of the alleged breaches of the volume limitation provisions of the CVP Note. Upon receipt of the payment, the Securities Purchase agreement between Progressive Care and CVP and all other documents entered into in connection therewith, were deemed to be terminated and of not further force or effect. 4. Iliad Research agreed to a decrease in the balance of the Iliad Research Note, effective as of May 31, 2021 of $ 180,000 as settlement of the alleged breaches of the volume limitation provisions of the Iliad Research Note. In the event the Iliad Research Note is not repaid by February 16, 2022, the outstanding balance of the Iliad Research Note will increase in the amount of $ 100,000 . 5. If Progressive Care exercises its right to prepay the Iliad Research Note, then it will make a payment to Iliad Research in an amount in cash equal to 105 % of the portion of the Outstanding Balance that it elected to repay (“the Prepayment Amount”). Progressive Care also has the right to treat up to ten percent (10%) of the Prepayment Amount as a Conversion As a result of item 3 above in the Settlement Agreement, the $ 175,000 received as settlement for alleged breaches on the volume limitations provision on the CVP Note was recorded as a Gain on Debt Settlement during the three months ended March 31, 2022. As a result of item 4 above in the Settlement Agreement, the Outstanding Balance Reduction in the Iliad Research note carrying value of $ 149,346 was recorded as a Gain on Debt Extinguishment during the three months ended March 31, 2021. The Iliad Research Note was not repaid by February 16, 2022 and the principal balance increased by $ 100,000 to $ 1,410,744 as of March 31, 2022. The $ 100,000 increase in the Iliad Research note balance was recorded as Interest Expense during the three months ended March 31, 2022. On May 13, 2022, Iliad Research agreed to (a) extend the maturity date of the Iliad Research Note to May 15, 2023 237,173 $47,435 53,607 for Standstill Period 2, if elected. As a result, the outstanding balance of the Iliad Research note, inclusive of Extension and Standstill Period 1 fees, is $ 2,656,336 The note balance has been partially satisfied through a series of redemption notices for conversion of note principal and accrued interest into shares of Progressive common stock at various conversion rates. The principal balance outstanding on the Iliad Research note was $ 1,410,744 and $ 1,310,744 at March 31, 2022 and December 31, 2021, respectively. Accrued interest on the Iliad Research note at March 31, 2022 and December 31, 2021, was $ 888,059 and $ 833,147 , respectively, and such amounts are included in long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. The Company has identified conversion features embedded within the Iliad Research note. The Company has determined that the conversion features represent an embedded derivative. Accordingly, the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative liability. On March 6, 2019, the Company recorded a derivative liability on the first tranche in the amount of $ 1,351,000 . On June 4, 2019, the Company recorded a derivative liability on the second tranche in the amount of $ 614,000 . For the three months ended March 31, 2022 and 2021, the Company recorded a Change in Fair Value of the Derivative Liability in the amount of ($ 953,100 426,680 , respectively. The derivative liability balance on the Iliad Research note at March 31, 2022 and December 31, 2021 was $ 1,175,000 221,900 , respectively. At inception, the fair value of the derivative instrument has been recorded as a liability on the Condensed Consolidated Balance Sheets with the corresponding amount recorded as a discount to the note. The discount was accreted from the issuance date to December 31, 2021, with a corresponding charge to interest expense. The change in the fair value of the derivative liability was recorded in other income or expenses in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, with the offset to the derivative liability on the Condensed Consolidated Balance Sheets. The fair value of the embedded derivative liability was determined using the Monte Carlo Simulation model on the issuance date. Debt Issuance Costs, Debt Discount and Investment Length Premium: Debt Issuance Costs consist of fees incurred through securing financing from Iliad Research on March 6, 2019. Debt Discount consists of the discount recorded upon recognition of the derivative liability upon issuance of the first and second tranches. Investment length premium is calculated at a 5% premium on the outstanding balance when the note is still outstanding at (a) eighteen months from the effective date, (b) twenty-four months from the effective date, and (c) thirty months from the effective date. Debt issuance costs, debt discount and investment length premium are amortized to interest expense over the term of the related debt using the effective interest method. Total amortization expense for the three months ended March 31, 2022 and 2021 was $ 285,870 and $ 224,130 , respectively. (B) Mortgage Note Payable – collateralized In 2018, PharmCo 901 closed on the purchase of land and building located at 400 Ansin Boulevard, Hallandale Beach, Florida. The purchase price was financed in part through a mortgage note and security agreement entered into with a commercial lender in the amount of $ 1,530,000 4.75 December 14, 2028 11,901 1,287,311 1,307,562 (C) Note Payable – Uncollateralized As of March 31, 2022 and December 31, 2021, the uncollateralized note payable represents a non-interest-bearing loan that is due on demand from an investor. (D) Note Payable – Collateralized In September 2019, the Company entered into a note obligation with a commercial lender, the proceeds from which were used to pay off a capital lease obligation on pharmacy equipment in the amount of $ 85,429 2,015 6.5 34,453 39,913 30,857 35,729 In April 2021, the Company entered into a note obligation with a commercial lender, the proceeds from which were used to purchase pharmacy equipment in the amount of $ 29,657 331 6.9 11,534 12,319 (E) U.S. CARES Act PPP Loans – Uncollateralized The Paycheck Protection Program (“PPP”), established as part of the Coronavirus Aid, Relief and Economic Security Act (“U.S. CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight-weeks or twenty-four-weeks as long as the borrower used the loan proceeds for eligible purposes, including payroll, mortgage interest payments, employee benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week or twenty-four week periods. The unforgiven portion of the PPP loans are payable over two or five years at an interest rate of 1 18 equal monthly installments The Company applied for forgiveness of the PPP loan received by PharmCo 1103 in April 2020 in the amount of $ 421,400 and on January 7, 2021, received notification from the lender that the U.S. Small Business Administration approved the forgiveness of the U.S. CARES Act PPP Loan for PharmCo 1103. The debt forgiveness in the amount of $ 421,400 is recorded as a Gain on Debt Extinguishment in the Company’s Condensed Consolidated Statements of Operations for the three months ended March 31, 2021. Future principal maturities of notes payable are as follows: Schedule of Future Principle Maturities Year Amount 2022 (nine months) $ 137,956 2023 2,403,640 2024 93,408 2025 96,228 Thereafter 956,301 Total $ 3,687,533 Interest expense on these notes payable exclusive of debt discount and debt issue cost amortization, was $ 172,642 and $ 95,669 for the three months ended March 31, 2022 and 2021, respectively. |
Lease Obligations
Lease Obligations | 3 Months Ended |
Mar. 31, 2022 | |
Lease Obligations | |
Lease Obligations | Note 10. Lease Obligations The Company has entered into a number of lease arrangements under which we are the lessee. Three of our leases are classified as finance leases and three of our leases are classified as operating leases. In addition, we have elected the short-term lease practical expedient in ASC Topic 842 related to real estate leases with terms of one year or less and short-term leases of equipment used in our pharmacy locations. The following is a summary of our lease arrangements. Finance Leases In May 2018, the Company entered into a finance lease obligation to purchase pharmacy equipment with a cost of $ 114,897 The terms of the lease agreement require monthly payments of $ 1,678 The finance lease obligation is secured by equipment with a net book value of $ 50,601 and $ 54,706 at March 31, 2022 and December 31, 2021, respectively. The Company assumed an equipment finance lease obligation for medication dispensing equipment from the acquisition of PharmCo 1002 in July 2018. The lease expired in March 2022. The finance lease obligation was secured by equipment with a net book value of $ 0 at March 31, 2022 and December 31, 2021, respectively. In December 2020, the Company entered into an interest-free finance lease obligation to purchase computer servers with a cost of $ 50,793 The terms of the lease agreement require monthly payments of $ 1,411 The finance lease obligation is secured by equipment with a net book value of $ 28,218 and $ 32,451 at March 31, 2022 and December 31, 2021, respectively. Operating Leases The Company entered into a lease agreement for its Orlando pharmacy on August 1, 2020 (the lease commencement date). The term of the lease is 66 February 1, 2026 4,310 The Company leases its North Miami Beach pharmacy locations under an operating lease agreement with a lease commencement date on September 1, 2021. The term of the lease is 60 August 31, 2026 5,237 The Company also leases its Palm Beach County pharmacy locations under operating lease agreements expiring in March 2024. The Company recognized lease costs associated with all leases as follows: Schedule of Lease Costs Associated with All Leases 2022 2021 For the Three Months Ended March 31, 2022 2021 Operating lease cost: Fixed rent expense $ 47,377 $ 207,272 Finance lease cost: Amortization of right of use assets (included in depreciation expense) 8,336 8,336 Interest expense 869 1,990 Total Lease Costs $ 56,582 $ 217,598 Supplemental cash flow information related to leases was as follows: Schedule of Supplemental Cash Flow Information Related to Leases 2022 2021 For the Three Months Ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 30,260 $ 49,853 Financing cash flows from finance leases 9,619 15,286 Total cash paid for lease liabilities $ 39,879 $ 65,139 Supplemental balance sheet information related to leases was as follows: Schedule of Supplemental Balance Sheet Information Related to Leases March 31, 2022 December 31, 2021 Operating leases: Operating lease right-of-use assets, net $ 559,051 $ 595,790 Operating lease liabilities: Current portion 153,404 149,744 Long-term portion 438,989 469,665 Finance leases: Finance lease right-of-use assets, net 78,821 87,156 Finance lease liabilities: Current portion 34,230 33,976 Long-term portion 49,159 57,814 Maturities of lease liabilities were as follows: Schedule of Maturities of lease liabilities Year Finance Lease Operating Lease Total Future Lease Commitments 2022 (nine months) $ 27,805 $ 132,284 $ 160,089 2023 35,662 181,787 217,449 2024 20,142 144,583 164,725 2025 5,035 134,933 139,968 2026 - 53,459 53,459 Total lease payments to be paid 88,644 647,046 735,690 Less: Future interest expense (5,255 ) (54,653 ) (59,908 ) Lease liabilities 83,389 592,393 675,782 Less: current maturities (34,230 ) (153,404 ) (187,634 ) Long-term portion of lease liabilities $ 49,159 $ 438,989 $ 488,148 |
Stockholders_ (Deficit) Equity
Stockholders’ (Deficit) Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ (Deficit) Equity | Note 11. Stockholders’ (Deficit) Equity Preferred Stock The Series A preferred stock is a non-dividend producing instrument that ranks superior to the Company’s common stock. Each one (1) share of the Series A Preferred Stock shall have voting rights equal to (x) 0.019607 multiplied by Numerator divided by minus With respect to all matters upon which stockholders are entitled to vote or to which shareholders are entitled to give consent, the holders of the outstanding shares of Series A Preferred Stock shall vote together with the holders of common stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Certificate of Incorporation or By-laws. On July 11, 2014, the board of directors approved the issuance of 51 50.99 20,000 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Legal Matters On May 3, 2022, a complaint was filed by the Plaintiff Positive Health Alliance, Inc. (“PHA”) against PharmCo LLC, a wholly owned subsidiary of the Company, in the U.S. Circuit Court of Miami Dade, Florida, alleging that defendant failed to pay amounts due and owing to PHA under the parties’ contract for discounted prescription drugs. PHA is seeking judgment against PharmCo for compensatory damages in the amount of $ 407,502.97 407,502.97 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13. Related Party Transactions During the years ended December 31, 2021, and 2020, the Company had a consulting arrangement with Spark Financial Consulting (“Spark”), which is a consulting company owned by an employee and beneficial shareholder of the Company. Spark provides business development services including but not limited to recruiting, targeting and evaluation of potential mergers and acquisitions, finding third party contractors and assisting with related negotiations in exchange for a monthly fee of $ 16,000 in 2021. Additionally, Spark may be entitled to additional fees for additional consulting services. During the three months ended March 31 and 2021, the Company paid Spark $ 48,000 . The agreement was terminated during the third quarter of 2021. The Company has an employment agreement (the “Agreement”) with a certain pharmacist, Head of the Compounding Department, who is the first paternal cousin to the beneficial shareholder and employee of the Company. In consideration for duties performed including but not limited to marketing, patient consultation, formulary development, patient and physician education, training, recruitment, sales management, as well as pharmacist responsibilities, the Company agreed to provide monthly compensation of $ 15,000 or $ 10,000 per month plus 5 % commission on monthly gross profits generated by the Compounding Department, whichever is greater. During the three months ended March 31 2021, payments to the pharmacist was $ 30,245. The agreement was terminated during the third quarter of 2021. |
Retirement Plan
Retirement Plan | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Note 14. Retirement Plan The Company sponsors a 401(k) retirement plan (“the Plan”) covering qualified employees of PharmCo 901, PharmCo 1002 and FPRX, as defined. Employees who have been employed more than one year are eligible to participate in the Plan. Through March 31, 2021, the Company matched the employee’s contribution up to a maximum of 3 0 2,200 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Progressive and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventories, estimated useful lives and potential impairment of property and equipment, estimated fair value of derivative liabilities using the Monte Carlo simulation model, fair value of assets acquired and liabilities assumed in business combinations, and estimates of current and deferred tax assets and liabilities. Making estimates requires management to exercise significant judgment. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including sales, expenses, and reserves and allowances, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, and national customers and markets. We have made estimates of the impact of COVID-19 within our condensed consolidated financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2021 financial statement presentation to conform to that of the current period. Total equity and net income are unchanged due to these reclassifications. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company maintains its cash and cash equivalents in bank deposit accounts which, at times, may exceed federally insured limits. The Company had $ 1,250,375 Cash Equivalents: The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of March 31, 2022 and December 31, 2021, the Company’s cash equivalents consist of a money market account. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at the invoiced amount. Trade accounts receivable primarily include amounts from third-party pharmacy benefit managers and insurance providers and are based on contracted prices. Trade accounts receivable are unsecured and require no collateral. The Company records an allowance for doubtful accounts for estimated differences between the expected and actual payment of accounts receivable. These reductions were made based upon reasonable and reliable estimates that were determined by reference to historical experience, contractual terms, and current conditions. Each quarter, the Company reevaluates its estimates to assess the adequacy of its allowance and adjusts the amounts as necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations are subject to intense competition, risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business failure. |
Billing Concentrations | Billing Concentrations The Company’s trade receivables are primarily from prescription medications billed to various insurance providers. Ultimately, the insured is responsible for payment should the insurance company not reimburse the Company. The Company generated reimbursements from three significant insurance providers for the period ended March 31, 2022: Schedule of Billing Concentrations Payors A 35 % B 29 % C 20 % Reimbursement percentage The Company generated reimbursements from three significant pharmacy benefit managers (PBMs) for the period ended March 31, 2022: PBMs A 57 % B 35 % C 5 % |
Inventory | Inventory Inventory is valued on a lower of first-in, first-out (FIFO) cost or net realizable value basis. Inventory primarily consists of prescription medications, pharmacy and testing supplies, and retail items. The Company provides a valuation allowance for obsolescence and slow-moving items. The Company recorded an allowance for obsolescence of $ 40,000 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost or fair value if acquired as part of a business combination. Property and equipment are depreciated or amortized using the straight-line method over their estimated useful lives. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded, when appropriate. Expenditures for maintenance and repairs are charged to expense as incurred. Estimated useful lives of property and equipment are as follows: Schedule of Estimated Useful Lives of Property and Equipment Description Estimated Useful Life Building 40 Leasehold improvements and fixtures Lesser of estimated useful life or life of lease Furniture and equipment 5 Computer equipment and software 3 Vehicles 3 5 Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges during the periods ended March 31, 2022 and 2021, respectively. |
Business acquisitions | Business acquisitions The Company records business acquisitions using the acquisition method of accounting. All of the assets acquired, liabilities assumed, and contractual contingencies are recognized at their fair value on the acquisition date. The application of the acquisition method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets that are depreciated and amortized and goodwill. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses and restructuring costs are recognized separately from the business combination and are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of FPRX and PharmCo 1002 over the value assigned to their net tangible and identifiable intangible assets. FPRX and PharmCo 1002 are considered to be the reporting units for goodwill. Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. For intangible assets purchased in a business combination, the estimated fair values of the assets received are used to establish their recorded values. Valuation techniques consistent with the market approach, income approach, and/or cost approach are used to measure fair value. Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and in interim periods if events or changes in circumstances indicate that the assets may be impaired. |
Intangible Assets | Intangible Assets Amortizing identifiable intangible assets generally represent the cost of client relationships and tradenames acquired, as well as non-compete agreements to which the Company is a party. In valuing these assets, the Company makes assumptions regarding useful lives and projected growth rates, and significant judgment is required. The Company periodically reviews its identifiable intangible assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of those assets exceed their respective fair values, additional impairment tests are performed to measure the amount of the impairment losses, if any. |
Fair Value Measurements | Fair Value Measurements Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 820 establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities (both common stock and preferred stock) that are traded in an active exchange market, as well as U.S. Treasury securities. Level 2: Unadjusted observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. This category generally includes certain U.S. Government, agency mortgage-backed debt securities, non-agency structured securities, corporate debt securities and preferred stocks. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. The following tables presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of: Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis Description Level 1 Level 2 Level 3 Balance at March 31, 2022 Derivative Liabilities $ - $ - $ 1,175,000 $ 1,175,000 Description Level 1 Level 2 Level 3 Balance at December 31, 2021 Derivative Liabilities $ - $ - $ 221,900 $ 221,900 The following table is a roll forward from December 31, 2021 to March 31, 2022 of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Schedule Fair Value Assets and Liabilities Recurring Basis Using Significant Unobservable Inputs Level 3 Derivative Liabilities Opening balance December 31, 2021 $ 221,900 Transfers into (out of) Level 3 Total (gains) or losses for the period Included in net (loss) income for the period 953,100 Closing balance March 31, 2022 $ 1,175,000 Change in fair value of derivative for the three months ended March 31, 2022 was included in net loss for the period. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consisted of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, lease liabilities, and notes payable. The carrying amounts of the Company’s financial instruments other than notes payable and lease liabilities generally approximate their fair values at March 31, 2022 and December 31, 2021 due to the short-term nature of these instruments. The carrying amount of notes payable approximated fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing. The carrying value of lease liabilities approximate fair value due to the implicit rate in the lease in relation to the Company’s borrowing rate and the duration of the leases. |
Derivative Liabilities | Derivative Liabilities U.S. GAAP requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and their measurement at fair value. In assessing the convertible debt instruments, management determines if the conversion feature requires bifurcation from the host instrument and recording of the bifurcated derivative instrument at fair value. Once derivative liabilities are determined, they are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value is recorded in results of operations as an adjustment to fair value of derivatives. The fair value of these derivative instruments is determined using the Monte Carlo Simulation Model. |
Revenue Recognition | Revenue Recognition The Company recognizes pharmacy revenue from dispensing prescription drugs at the time the drugs are physically delivered to a customer or when a customer picks up their prescription or purchases merchandise at the store, which is the point in time when control transfers to the customer. Each prescription claim is considered an arrangement with the customer and is a separate performance obligation. Payments are received directly from the customer at the point of sale, or the customers’ insurance provider is billed electronically. For third party medical insurance and other claims, authorization to ensure payment is obtained from the customer’s insurance provider before the medication is dispensed to the customer. Authorization is obtained for these sales electronically and a corresponding authorization number is issued by the customers’ insurance provider. The Company recognizes testing revenue when the tests are performed, and results are delivered to the customer. Each test is considered an arrangement with the customer and is a separate performance obligation. Payment is generally received in advance from the customer. Billings for most prescription orders are with third-party payers, including Medicare, Medicaid, and insurance carriers. Customer returns are nominal. Prescription revenues exceeded 86 % of total revenue for the three months ended March 31, 2022 and 2021, respectively. The Company accrues an estimate of fees, including direct and indirect remuneration fees (“DIR fees”), which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of revenue at the time revenue is recognized. Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known. The following table disaggregates net revenue by categories for the three months ended March 31: Schedule of Disaggregates Net Revenue by Categories 2022 2021 Prescription revenue $ 8,605,882 $ 8,631,048 340B contract revenue 387,956 724,498 Testing revenue 1,291,017 553,274 Rent and other revenue 207 5 Subtotal 10,285,062 9,908,825 PBM fees (234,067 ) (304,237 ) Sales returns - (124 ) Revenues, net $ 10,050,995 $ 9,604,464 |
Cost of Revenue | Cost of Revenue Cost of pharmacy revenue is derived based upon vendor purchases relating to prescriptions sold, cost of testing supplies for tests administered to patients, and point-of-sale scanning information for non-prescription sales and is adjusted based on periodic inventories. All other costs related to revenues are expensed as incurred. |
DIR Fees | DIR Fees The Company reports Direct and Indirect Remuneration (“DIR”) fees as a reduction of revenue on the accompanying Condensed Consolidated Statements of Operations. DIR Fees are fees charged by Pharmacy Benefit Managers (“PBMs”) to pharmacies for network participation as well as periodic reimbursement reconciliations. For some PBMs, DIR fees are charged at the time of the settlement of a pharmacy claim. Other PBMs do not determine DIR fees at the claim settlement date, and therefore DIR fees are collected from pharmacies after claim settlement, often as clawbacks of reimbursements based on factors that vary from plan to plan. For example, two PBMs calculate DIR fees on a trimester basis and charge the Company for these fees as reductions of reimbursements paid to the Company 2-3 months after the end of the trimester (e.g., DIR fees for January – April 2021 claims were charged by these PBMs in July – August 2021). For DIR fees that are not collected at the time of claim settlement, the Company records an accrued liability at each reporting date for estimated DIR fees that are expected to be collected by the PBMs in a future period. The estimated liability for these fees is highly subjective and the actual amount collected may differ from the accrued liability. The uncertainty of management’s estimates is due to inadequate disclosure to the Company by the PBMs as to exactly how these fees are calculated either at the time the DIR fees are actually assessed and reported to the Company. The detail level of the disclosure of assessed DIR fees varies based on the information provided by the PBM. |
Vendor Concentrations | Vendor Concentrations For the three months ended March 31, 2022 and 2021, the Company had significant vendor concentrations with one vendor. The purchases from this significant vendor were 98 94 |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling expenses primarily consist of store salaries, contract labor, occupancy costs, and expenses directly related to the stores. General and administrative costs include advertising, insurance, professional fees, and depreciation and amortization. |
Advertising | Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Advertising expense was $ 97,990 59,311 |
Share-Based Payment Arrangements | Share-Based Payment Arrangements Generally, all forms of share-based payments, including warrants, are measured at their fair value on the awards’ grant date typically using a Black-Scholes pricing model, based on the estimated number of awards that are ultimately expected to vest. The costs associated with share-based compensation awards to employees and non-employee directors are measured at the grant date based on the calculated fair value of the award and recognized as an expense ratably over the recipient’s requisite service period during which that award vests or becomes unrestricted. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The shares are subsequently re-measured at their fair value at each reporting date over the service period of the awards. The expense resulting from share-based payments is recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Progressive Care Inc., RXMD Therapeutics and PharmCoRx 1103 are taxed as C corporations. PharmCo 901 and PharmCo 1002 are taxed as partnerships, wherein each member is responsible for the tax liability, if any, related to its proportionate share of PharmCo 901 and PharmCo 1002’s taxable income. Progressive Care Inc. has a 100 The provision for income taxes for the three months ended March 31, 2021 on the Condensed Consolidated Statements of Operations represents the minimum state corporate tax payments. There was no current tax provision for the three months ended March 31, 2022 and 2021 because the Company did not have taxable income during those periods. Total available net operating losses to be carried forward to future taxable years was approximately $ 11.6 million as of March 31, 2022, $ 6 million of which will expire in various years through 2038 . The temporary differences giving rise to deferred income taxes principally relate to accelerated depreciation on property and equipment and amortization of goodwill recorded for tax purposes, reserves for estimated doubtful accounts and inventory obsolescence and net operating losses recorded for financial reporting purposes. The Company’s net deferred tax asset at March 31, 2022 and December 31, 2021 was fully offset by a 100 % valuation allowance as it was not more likely than not that the tax benefits of the net deferred tax asset would be realized. The change in the valuation allowance decreased by approximately $ 20,000 for the period ended March 31, 2022. The Company accounts for uncertainty in income taxes by recognizing a tax position in the condensed consolidated financial statements only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company records interest and penalties related to tax uncertainties, if any, as income tax expense. Based on management’s evaluation, the Company does not believe it has any uncertain tax positions for the three months ended March 31, 2022 and 2021. |
(Loss) Income per Share | (Loss) Income per Share Basic (loss) income per share (“EPS”) is computed by dividing net (loss) income available to common shareholders by the weighted average number of common shares outstanding during the, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock warrants), and convertible debt, using the if converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. |
Paycheck Protection Program Loan | Paycheck Protection Program Loan The Company records Paycheck Protection Program (“PPP”) loan proceeds in accordance with Accounting Standards Codification (“ASC”) 470, Debt. The Company treats the PPP loan as indebtedness, which is extinguished and recorded as a gain on debt extinguishment when legally released by the primary obligor. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Debt In August 2020, the FASB issued 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which among other things, simplifies the accounting models for the allocation of proceeds attributable to the issuance of a convertible debt instrument. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (i) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (ii) a convertible debt instrument was issued at a substantial premium. The standard became effective for the Company in the first quarter of 2022 and did not have a material effect on the Company’s condensed consolidated financial statements. |
Accounting Pronouncements Issued but not yet Adopted | Accounting Pronouncements Issued but not yet Adopted Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)—simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is required to be adopted for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this guidance on the Company’s condensed consolidated financial statements. Credit Losses In June 2016, the FASB issued ASU 2016-13, “Current Expected Credit Losses” (“ASU 2016-13”), which introduces an impairment model based on expected, rather than incurred, losses. Additionally, it requires expanded disclosures regarding (a) credit risk inherent in a portfolio and how management monitors the portfolio’s credit quality; (b) management’s estimate of expected credit losses; and (c) changes in estimates of expected credit losses that have taken place during the period. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022. The Company has not yet quantified the impact of ASU 2016-13 on its condensed consolidated financial statements. However, it is not expected to have a material effect on the Company’s condensed consolidated financial statements. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company’s condensed consolidated financial statements. |
Subsequent Events | Subsequent Events Management has evaluated subsequent events and transactions for potential recognition or disclosure in the condensed consolidated financial statements through May 16, 2022, the date the condensed consolidated financial statements were available to be issued. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Billing Concentrations | Schedule of Billing Concentrations Payors A 35 % B 29 % C 20 % Reimbursement percentage The Company generated reimbursements from three significant pharmacy benefit managers (PBMs) for the period ended March 31, 2022: PBMs A 57 % B 35 % C 5 % |
Schedule of Estimated Useful Lives of Property and Equipment | Schedule of Estimated Useful Lives of Property and Equipment Description Estimated Useful Life Building 40 Leasehold improvements and fixtures Lesser of estimated useful life or life of lease Furniture and equipment 5 Computer equipment and software 3 Vehicles 3 5 |
Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following tables presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of: Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis Description Level 1 Level 2 Level 3 Balance at March 31, 2022 Derivative Liabilities $ - $ - $ 1,175,000 $ 1,175,000 Description Level 1 Level 2 Level 3 Balance at December 31, 2021 Derivative Liabilities $ - $ - $ 221,900 $ 221,900 |
Schedule Fair Value Assets and Liabilities Recurring Basis Using Significant Unobservable Inputs Level 3 | The following table is a roll forward from December 31, 2021 to March 31, 2022 of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Schedule Fair Value Assets and Liabilities Recurring Basis Using Significant Unobservable Inputs Level 3 Derivative Liabilities Opening balance December 31, 2021 $ 221,900 Transfers into (out of) Level 3 Total (gains) or losses for the period Included in net (loss) income for the period 953,100 Closing balance March 31, 2022 $ 1,175,000 |
Schedule of Disaggregates Net Revenue by Categories | The following table disaggregates net revenue by categories for the three months ended March 31: Schedule of Disaggregates Net Revenue by Categories 2022 2021 Prescription revenue $ 8,605,882 $ 8,631,048 340B contract revenue 387,956 724,498 Testing revenue 1,291,017 553,274 Rent and other revenue 207 5 Subtotal 10,285,062 9,908,825 PBM fees (234,067 ) (304,237 ) Sales returns - (124 ) Revenues, net $ 10,050,995 $ 9,604,464 |
Accounts Receivable _ Trade, _2
Accounts Receivable – Trade, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following at: Schedule of Accounts Receivable March 31, 2022 December 31, 2021 Gross accounts receivable - trade $ 1,714,527 $ 2,395,048 Less: Allowance for doubtful accounts (169,400 ) (207,200 ) Accounts receivable – trade, net $ 1,545,127 $ 2,187,848 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property And Equipment, Net | Property and equipment, net consisted of the following at: Schedule of Property And Equipment, Net March 31, 2022 December 31, 2021 Building $ 1,651,069 $ 1,651,069 Building improvements 507,238 507,238 Land 184,000 184,000 Leasehold improvements and fixtures 276,614 276,614 Furniture and equipment 330,291 330,291 Computer equipment and software 101,230 101,230 Vehicles 81,633 81,633 Total 3,132,075 3,132,075 Less: accumulated depreciation and amortization (742,698 ) (708,578 ) Property and equipment, net $ 2,389,377 $ 2,423,497 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following at: Schedule of Intangible Assets March 31, December 31, 2022 2021 Trade names $ 362,000 $ 362,000 Pharmacy records 263,000 263,000 Non-compete agreements 166,000 166,000 Website 67,933 67,933 Subtotal 858,933 858,933 Less accumulated amortization (790,751 ) (782,566 ) Net intangible assets $ 68,182 $ 76,367 Software not in service 86,424 76,424 Total Intangible Assets, net $ 154,606 $ 152,791 |
Schedule of Estimated Amortization Expense for Intangible Assets | Schedule of Estimated Amortization Expense for Intangible Assets Year Amount 2022 (nine months) 23,624 2023 31,452 2024 13,106 Total $ 68,182 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following at: Schedule of Accounts Payable and Accrued Liabilities March 31, December 31, 2022 2021 Accounts payable and accrued liabilities consisted of the following: Accounts payable - trade $ 5,145,984 $ 4,677,555 Accrued payroll and payroll taxes 186,563 143,074 Accrued DIR fees 774,904 712,002 Accrued legal fees 306,588 306,588 Other accrued liabilities 239,661 160,815 Totals $ 6,653,700 $ 6,000,034 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consisted of the following at: Schedule of Notes Payable March 31, December 31, 2022 2021 A. Convertible notes payable and accrued interest - collateralized $ 2,298,803 $ 2,143,891 B. Mortgage note payable – commercial bank - collateralized 1,287,311 1,307,562 C. Note payable – uncollateralized 25,000 25,000 D. Note payable - collateralized 45,989 52,231 Insurance premium financing 30,430 68,164 Subtotal 3,687,533 3,596,848 Less Unamortized debt discount - (198,677 ) Less Unamortized debt issuance costs - (575 ) Less Unamortized investment length premium - (86,618 ) Total 3,687,533 3,310,978 Less: Current portion of notes payable (163,937 ) (202,184 ) Long-term portion of notes payable $ 3,523,596 $ 3,108,794 |
Schedule of Future Principle Maturities | Future principal maturities of notes payable are as follows: Schedule of Future Principle Maturities Year Amount 2022 (nine months) $ 137,956 2023 2,403,640 2024 93,408 2025 96,228 Thereafter 956,301 Total $ 3,687,533 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Lease Obligations | |
Schedule of Lease Costs Associated with All Leases | The Company recognized lease costs associated with all leases as follows: Schedule of Lease Costs Associated with All Leases 2022 2021 For the Three Months Ended March 31, 2022 2021 Operating lease cost: Fixed rent expense $ 47,377 $ 207,272 Finance lease cost: Amortization of right of use assets (included in depreciation expense) 8,336 8,336 Interest expense 869 1,990 Total Lease Costs $ 56,582 $ 217,598 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: Schedule of Supplemental Cash Flow Information Related to Leases 2022 2021 For the Three Months Ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 30,260 $ 49,853 Financing cash flows from finance leases 9,619 15,286 Total cash paid for lease liabilities $ 39,879 $ 65,139 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: Schedule of Supplemental Balance Sheet Information Related to Leases March 31, 2022 December 31, 2021 Operating leases: Operating lease right-of-use assets, net $ 559,051 $ 595,790 Operating lease liabilities: Current portion 153,404 149,744 Long-term portion 438,989 469,665 Finance leases: Finance lease right-of-use assets, net 78,821 87,156 Finance lease liabilities: Current portion 34,230 33,976 Long-term portion 49,159 57,814 |
Schedule of Maturities of lease liabilities | Maturities of lease liabilities were as follows: Schedule of Maturities of lease liabilities Year Finance Lease Operating Lease Total Future Lease Commitments 2022 (nine months) $ 27,805 $ 132,284 $ 160,089 2023 35,662 181,787 217,449 2024 20,142 144,583 164,725 2025 5,035 134,933 139,968 2026 - 53,459 53,459 Total lease payments to be paid 88,644 647,046 735,690 Less: Future interest expense (5,255 ) (54,653 ) (59,908 ) Lease liabilities 83,389 592,393 675,782 Less: current maturities (34,230 ) (153,404 ) (187,634 ) Long-term portion of lease liabilities $ 49,159 $ 438,989 $ 488,148 |
Organization & Nature of Oper_2
Organization & Nature of Operations (Details Narrative) | Nov. 29, 2005 |
PharmaCo, LLC [Member] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Equity method investment ownership percentage | 100.00% |
Schedule of Billing Concentrati
Schedule of Billing Concentrations (Details) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 3 Months Ended |
Mar. 31, 2022 | |
Payor A [Member] | |
Product Information [Line Items] | |
Reimbursement percentage | 35.00% |
Payor B [Member] | |
Product Information [Line Items] | |
Reimbursement percentage | 29.00% |
Payor C [Member] | |
Product Information [Line Items] | |
Reimbursement percentage | 20.00% |
Pharmacy Benefit Managers A [Member] | |
Product Information [Line Items] | |
Reimbursement percentage | 57.00% |
Pharmacy Benefit Managers B [Member] | |
Product Information [Line Items] | |
Reimbursement percentage | 35.00% |
Pharmacy Benefit Managers C [Member] | |
Product Information [Line Items] | |
Reimbursement percentage | 5.00% |
Schedule of Estimated Useful Li
Schedule of Estimated Useful Lives of Property and Equipment (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 40 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | Lesser of estimated useful life or life of lease |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Schedule of Fair Value of Finan
Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Total derivative liabilities | $ 1,175,000 | $ 221,900 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative [Line Items] | ||
Total derivative liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Derivative [Line Items] | ||
Total derivative liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Derivative [Line Items] | ||
Total derivative liabilities | $ 1,175,000 | $ 221,900 |
Schedule Fair Value Assets and
Schedule Fair Value Assets and Liabilities Recurring Basis Using Significant Unobservable Inputs Level 3 (Details) - Derivative Liabilities on Conversion Feature [Member] | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Offsetting Assets [Line Items] | |
Fair value, beginning balance | $ 221,900 |
Net (loss) income | 953,100 |
Fair value, ending balance | $ 1,175,000 |
Schedule of Disaggregates Net R
Schedule of Disaggregates Net Revenue by Categories (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||
Subtotal | $ 10,285,062 | $ 9,908,825 |
Revenues, net | 10,050,995 | 9,604,464 |
Prescription Revenue [Member] | ||
Product Information [Line Items] | ||
Subtotal | 8,605,882 | 8,631,048 |
340B Contract Revenue [Member] | ||
Product Information [Line Items] | ||
Subtotal | 387,956 | 724,498 |
Testing Revenue [Member] | ||
Product Information [Line Items] | ||
Subtotal | 1,291,017 | 553,274 |
Rent And Other Revenue [Member] | ||
Product Information [Line Items] | ||
Subtotal | 207 | 5 |
Pharmacy Benefit Managers Fees [Member] | ||
Product Information [Line Items] | ||
Revenues, net | (234,067) | (304,237) |
Sales Returns [Member] | ||
Product Information [Line Items] | ||
Revenues, net | $ (124) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Product Information [Line Items] | |||
Excess cash | $ 1,250,375 | ||
Allowance for obsolescence | 40,000 | $ 40,000 | |
Advertising expense | 97,990 | $ 59,311 | |
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration | 11,600,000 | ||
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | $ 6,000,000 | ||
Income Tax Examination, Description | expire in various years through 2038 | ||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 100.00% | ||
Deferred Tax Assets, Valuation Allowance | $ 20,000 | ||
Pharma Co 901 [Member] | |||
Product Information [Line Items] | |||
Ownership interest | 100.00% | ||
Pharma Co 1002 [Member] | |||
Product Information [Line Items] | |||
Ownership interest | 100.00% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Vendor One [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 98.00% | 94.00% | |
Prescription Revenue [Member] | |||
Product Information [Line Items] | |||
Revenue percentage | 86.00% | 86.00% |
Liquidity and Going Concern C_2
Liquidity and Going Concern Consideration (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||
Accumulated deficit | $ 9,890,413 | $ 8,528,937 | |
Net loss | 1,361,476 | $ (26,852) | |
Loss from operations | 135,557 | 643,676 | |
Net cash provided by operating activities | 992,804 | $ 49,663 | |
Cash and cash equivalent | 2,400,000 | ||
Research Convertible Note [Member] | |||
Short-Term Debt [Line Items] | |||
Convertible Debt | $ 2,298,803 |
Schedule of Accounts Receivable
Schedule of Accounts Receivable (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Gross accounts receivable - trade | $ 1,714,527 | $ 2,395,048 |
Less: Allowance for doubtful accounts | (169,400) | (207,200) |
Accounts receivable – trade, net | $ 1,545,127 | $ 2,187,848 |
Accounts Receivable _ Trade, _3
Accounts Receivable – Trade, net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Receivables [Abstract] | ||
Provision for doubtful accounts | $ (37,800) | $ 14,400 |
Schedule of Property And Equipm
Schedule of Property And Equipment, Net (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 3,132,075 | $ 3,132,075 |
Less: accumulated depreciation and amortization | (742,698) | (708,578) |
Property and equipment, net | 2,389,377 | 2,423,497 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 1,651,069 | 1,651,069 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 507,238 | 507,238 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 184,000 | 184,000 |
Leaseholds and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 276,614 | 276,614 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 330,291 | 330,291 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 101,230 | 101,230 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 81,633 | $ 81,633 |
Property and Equipment, net (De
Property and Equipment, net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 42,456 | $ 52,271 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | $ 858,933 | $ 858,933 |
Less accumulated amortization | (790,751) | (782,566) |
Net intangible assets | 68,182 | 76,367 |
Software not in service | 86,424 | 76,424 |
Total Intangible Assets, net | 154,606 | 152,791 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | 362,000 | 362,000 |
Pharmacy Records [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | 263,000 | 263,000 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | 166,000 | 166,000 |
Website [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | $ 67,933 | $ 67,933 |
Schedule of Estimated Amortizat
Schedule of Estimated Amortization Expense for Intangible Assets (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 (nine months) | $ 23,624 | |
2023 | 31,452 | |
2024 | 13,106 | |
Total | $ 68,182 | $ 76,367 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 8,185 | $ 87,008 |
Schedule of Accounts Payable an
Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable - trade | $ 5,145,984 | $ 4,677,555 |
Accrued payroll and payroll taxes | 186,563 | 143,074 |
Accrued DIR fees | 774,904 | 712,002 |
Accrued legal fees | 306,588 | 306,588 |
Other accrued liabilities | 239,661 | 160,815 |
Totals | $ 6,653,700 | $ 6,000,034 |
Schedule of Notes Payable (Deta
Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | ||
Subtotal | $ 3,687,533 | $ 3,596,848 |
Less Unamortized debt discount | (198,677) | |
Less Unamortized debt issuance costs | (575) | |
Less Unamortized investment length premium | (86,618) | |
Total | 3,687,533 | 3,310,978 |
Less: Current portion of notes payable | (163,937) | (202,184) |
Long-term portion of notes payable | 3,523,596 | 3,108,794 |
Convertible Notes Payable And Accrued Interest Collateralized [Member] | ||
Short-Term Debt [Line Items] | ||
Subtotal | 2,298,803 | 2,143,891 |
Mortgage Note Payable Commercial Bank Collateralized [Member] | ||
Short-Term Debt [Line Items] | ||
Subtotal | 1,287,311 | 1,307,562 |
Note Payable Uncollateralized [Member] | ||
Short-Term Debt [Line Items] | ||
Subtotal | 25,000 | 25,000 |
Note Payable Collateralized [Member] | ||
Short-Term Debt [Line Items] | ||
Subtotal | 45,989 | 52,231 |
Insurance Premium Financing [Member] | ||
Short-Term Debt [Line Items] | ||
Subtotal | $ 30,430 | $ 68,164 |
Schedule of Future Principle Ma
Schedule of Future Principle Maturities (Details) | Mar. 31, 2022USD ($) |
Debt Disclosure [Abstract] | |
2022 (nine months) | $ 137,956 |
2023 | 2,403,640 |
2024 | 93,408 |
2025 | 96,228 |
Thereafter | 956,301 |
Total | $ 3,687,533 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | May 13, 2022 | Mar. 06, 2019 | Sep. 30, 2021 | May 31, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Apr. 30, 2020 | Sep. 30, 2019 | Jan. 31, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | Apr. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | Jun. 30, 2021 | Jun. 04, 2019 |
Short-Term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Unamortized Discount | $ 198,677 | |||||||||||||||
Outstanding notes payable | $ 3,687,533 | $ 3,310,978 | ||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||||||||||||||
Gain on debt extinguishment amount | $ 175,000 | $ 570,746 | ||||||||||||||
Proceeds from notes payable | 421,400 | |||||||||||||||
Interest Expense | 459,381 | 321,789 | ||||||||||||||
Derivative liability | 1,175,000 | $ 221,900 | ||||||||||||||
Net book value | 2,389,377 | 2,423,497 | ||||||||||||||
Interest Expense, Debt | 172,642 | 95,669 | ||||||||||||||
Pharmacy Equipment [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Net book value | 50,601 | 54,706 | ||||||||||||||
Iliad Research And Trading LP [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Outstanding notes payable | 1,410,744 | 1,310,744 | ||||||||||||||
Accrued interest | 888,059 | 833,147 | ||||||||||||||
Derivative liability | $ 1,351,000 | $ 614,000 | ||||||||||||||
Change in fair value of derivative liability | 953,100 | (426,680) | ||||||||||||||
Increase (Decrease) in Derivative Liabilities | (953,100) | 426,680 | ||||||||||||||
Amortization | 285,870 | 224,130 | ||||||||||||||
Iliad Research And Trading LP [Member] | Iliad Research Note [Member] | Subsequent Event [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | $ 2,656,336 | |||||||||||||||
Maturity date | May 15, 2023 | |||||||||||||||
Debt instrument, description | Iliad Research agreed to (a) extend the maturity date of the Iliad Research Note to | |||||||||||||||
Extension fee | $ 237,173 | |||||||||||||||
Iliad Research And Trading LP [Member] | Iliad Research Note [Member] | Subsequent Event [Member] | Standstill Period 1 [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Standstill fee | 47,435 | |||||||||||||||
Iliad Research And Trading LP [Member] | Iliad Research Note [Member] | Subsequent Event [Member] | Standstill Period 2 [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Standstill fee | $ 53,607 | |||||||||||||||
Iliad Research And Trading LP [Member] | Mortgage Note Payable Commercial Bank Collateralized [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Maturity date | Dec. 14, 2028 | |||||||||||||||
Interest rate | 4.75% | |||||||||||||||
Purchase price, amount | $ 1,530,000 | |||||||||||||||
Debt repayment | $ 11,901 | |||||||||||||||
Mortgage payable | 1,287,311 | 1,307,562 | ||||||||||||||
Iliad Research And Trading LP [Member] | Note Payable Collateralized [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Outstanding notes payable | 34,453 | 39,913 | ||||||||||||||
Interest rate | 6.90% | 6.50% | ||||||||||||||
Debt and lease obligation | $ 85,429 | |||||||||||||||
Debt instrument, payment | $ 331 | $ 2,015 | ||||||||||||||
Net book value | 30,857 | 35,729 | ||||||||||||||
Payment for purchase of equipment | $ 29,657 | |||||||||||||||
Iliad Research And Trading LP [Member] | Note Payable Collateralized [Member] | Pharmacy Equipment [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Net book value | $ 11,534 | 12,319 | ||||||||||||||
Iliad Research And Trading LP [Member] | US CARES Act PPP Loans Uncollateralized [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Interest rate | 1.00% | |||||||||||||||
Frequency of periodic payment | 18 equal monthly installments | |||||||||||||||
Debt instrument, forgiveness | $ 421,400 | 421,400 | ||||||||||||||
Iliad Research And Trading LP [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 3,310,000 | |||||||||||||||
Debt Instrument, Unamortized Discount | 300,000 | |||||||||||||||
Debt Issuance Costs, Net | $ 10,000 | |||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | |||||||||||||||
Maturity date | Apr. 15, 2022 | May 15, 2022 | ||||||||||||||
Interest rate | 10.00% | |||||||||||||||
Investment premium amount | $ 117,619 | $ 136,486 | $ 168,619 | |||||||||||||
Percentage of increase on the outstanding note | 5.00% | |||||||||||||||
Debt instrument, description | (i) ten percent (10%) of Progressive’s Common Stock dollar trading volume (the “Trading Volume”) in such week (which, for purposes hereof, means the number of shares traded during such calendar week multiplied by the volume weighted average price per share for such week), and (ii) $100,000.00 (the “Volume Limitation”); provided; however, that if Lender’s Net Sales are less than the Volume Limitation for any given week, then in the following week (or two (2) weeks in the case of any week where the Closing Trade Price on any given day during that week is 25% greater than the previous week’s VWAP) Lender shall be allowed to sell an additional amount of Conversion Shares equal to the difference between the amount Lender was allowed to sell and the amount Lender actually sold. | |||||||||||||||
Excess sales, amount | $ 180,000 | |||||||||||||||
Reduction in carrying value | 180,000 | |||||||||||||||
Gain on debt extinguishment amount | $ 180,000 | |||||||||||||||
Iliad Research And Trading LP [Member] | Securities Purchase Agreement [Member] | Tranche One [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Unamortized Discount | $ 115,000 | |||||||||||||||
Debt Issuance Costs, Net | 10,000 | |||||||||||||||
Outstanding notes payable | 2,425,000 | |||||||||||||||
Iliad Research And Trading LP [Member] | Securities Purchase Agreement [Member] | Tranche Second [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Unamortized Discount | 185,000 | |||||||||||||||
Outstanding notes payable | $ 885,000 | |||||||||||||||
Iliad Research And Trading LP [Member] | Settlement Agreement [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Percentage of increase on the outstanding note | 2.00% | |||||||||||||||
Reduction in carrying value | $ 180,000 | |||||||||||||||
Gain on debt extinguishment amount | $ 175,000 | $ 149,346 | ||||||||||||||
Proceeds from notes payable | 175,000 | |||||||||||||||
Increase (decrease) in long term notes payable | $ 100,000 | |||||||||||||||
Debt instrument increased percentage of note | 105.00% | |||||||||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | right to treat up to ten percent (10%) of the Prepayment Amount as a Conversion | |||||||||||||||
Notes Payable, Noncurrent | $ 1,410,744 | |||||||||||||||
Interest Expense | $ 100,000 |
Schedule of Lease Costs Associa
Schedule of Lease Costs Associated with All Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lease Obligations | ||
Fixed rent expense | $ 47,377 | $ 207,272 |
Amortization of right of use assets (included in depreciation expense) | 8,336 | 8,336 |
Interest expense | 869 | 1,990 |
Total Lease Costs | $ 56,582 | $ 217,598 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lease Obligations | ||
Operating cash flows from operating leases | $ 30,260 | $ 49,853 |
Financing cash flows from finance leases | 9,619 | 15,286 |
Total cash paid for lease liabilities | $ 39,879 | $ 65,139 |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Lease Obligations | ||
Operating lease right-of-use assets, net | $ 559,051 | $ 595,790 |
Operating lease liabilities: | ||
Current portion | 153,404 | 149,744 |
Long-term portion | 438,989 | 469,665 |
Finance lease right-of-use assets, net | 78,821 | 87,156 |
Finance lease liabilities: | ||
Current portion | 34,230 | 33,976 |
Long-term portion | $ 49,159 | $ 57,814 |
Schedule of Maturities of lease
Schedule of Maturities of lease liabilities (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Finance Lease, Liability, to be Paid [Abstract] | ||
Finance Lease, 2022 (nine months) | $ 27,805 | |
Finance Lease, 2023 | 35,662 | |
Finance Lease, 2024 | 20,142 | |
Finance Lease, 2025 | 5,035 | |
Finance Lease, 2026 | ||
Finance Lease, Total lease payments to be paid | 88,644 | |
Finance Lease, Less: Future interest expense | (5,255) | |
Finance Lease, Lease liabilities | 83,389 | |
Finance Lease, Less: current maturities | (34,230) | $ (33,976) |
Finance Lease, Long-term portion of lease liabilities | 49,159 | 57,814 |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | ||
Operating Lease, 2022 (nine months) | 132,284 | |
Operating Lease, 2023 | 181,787 | |
Operating Lease, 2024 | 144,583 | |
Operating Lease, 2025 | 134,933 | |
Operating Lease, 2026 | 53,459 | |
Operating Lease, Total lease payments to be paid | 647,046 | |
Operating Lease, Less: Future interest expense | (54,653) | |
Operating Lease, Lease liabilities | 592,393 | |
Operating Lease, Less: current maturities | (153,404) | (149,744) |
Operating Lease, Long-term portion of lease liabilities | 438,989 | $ 469,665 |
Contractual Obligation, Fiscal Year Maturity [Abstract] | ||
Total Future Lease Commitments, 2022 (nine months) | 160,089 | |
Total Future Lease Commitments, 2023 | 217,449 | |
Total Future Lease Commitments, 2024 | 164,725 | |
Total Future Lease Commitments, 2025 | 139,968 | |
Total Future Lease Commitments, 2026 | 53,459 | |
Total Future Lease Commitments, Total lease payments to be paid | 735,690 | |
Total Future Lease Commitments, Less: Future interest expense | (59,908) | |
Total Future Lease Commitments, Lease liabilities | 675,782 | |
Total Future Lease Commitments, Less: current maturities | (187,634) | |
Total Future Lease Commitments, Long-term portion of lease liabilities | $ 488,148 |
Lease Obligations (Details Narr
Lease Obligations (Details Narrative) - USD ($) | Feb. 01, 2021 | Dec. 31, 2020 | May 31, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||||||
Lease, Cost | $ 56,582 | $ 217,598 | ||||
Finance Lease, Principal Payments | 9,619 | 15,286 | ||||
Property, Plant and Equipment, Net | 2,389,377 | $ 2,423,497 | ||||
Operating lease, payments | $ 30,260 | $ 49,853 | ||||
Orlando pharmacy [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Operating lease termination date | 66 months | |||||
Operating lease termination date | Feb. 1, 2026 | |||||
Operating lease, payments | $ 4,310 | |||||
North miami beach pharmacy [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Operating lease termination date | 60 months | |||||
Operating lease termination date | Aug. 31, 2026 | |||||
Operating lease, payments | $ 5,237 | |||||
Pharmacy Equipment [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Lease, Cost | $ 114,897 | |||||
Lessee, Finance Lease, Description | The terms of the lease agreement require monthly payments of $1,678 plus applicable tax over 84 months ending March 2025 including interest at the rate of 6%. | |||||
Finance Lease, Principal Payments | $ 1,678 | |||||
Property, Plant and Equipment, Net | $ 50,601 | 54,706 | ||||
Medication Dispensing Equipment [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, Plant and Equipment, Net | 0 | |||||
Computer Servers [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Lease, Cost | $ 50,793 | |||||
Lessee, Finance Lease, Description | The terms of the lease agreement require monthly payments of $1,411 plus applicable tax over 36 months ending November 2023. | |||||
Finance Lease, Principal Payments | $ 1,411 | |||||
Property, Plant and Equipment, Net | $ 28,218 | $ 32,451 |
Stockholders_ (Deficit) Equity
Stockholders’ (Deficit) Equity (Details Narrative) - Series A Preferred Stock [Member] - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Jul. 11, 2014 | |
Class of Stock [Line Items] | |||
Preferred voting rights, description | Each one (1) share of the Series A Preferred Stock shall have voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding common stock and Preferred Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. | ||
Number of shares issued | 51 | 51 | 51 |
Preferred stock voting percentage | 50.99% | ||
Amount for exchange of voting power | $ 20,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - Positive Health Alliance, Inc. [Member] - USD ($) | May 03, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Loss Contingencies [Line Items] | |||
Accounts payable and accrued liabilities | $ 407,502.97 | $ 407,502.97 | |
Subsequent Event [Member] | |||
Loss Contingencies [Line Items] | |||
Compensatory damage value | $ 407,502.97 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Consulting Arrangement [Member] | Spark Financial Consulting [Member] | |||
Related Party Transaction [Line Items] | |||
Monthly fee amount | $ 16,000 | ||
Repayments of related party | $ 48,000 | ||
Employment Arrangement [Member] | |||
Related Party Transaction [Line Items] | |||
Commission on monthly gross profits percentage | 5.00% | ||
Employment Arrangement [Member] | Minimum [Member] | |||
Related Party Transaction [Line Items] | |||
Monthly compensation, amount | $ 15,000 | ||
Employment Arrangement [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Monthly compensation, amount | $ 10,000 |
Retirement Plan (Details Narrat
Retirement Plan (Details Narrative) - USD ($) | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
Retirement Benefits [Abstract] | |||
Employee contribution percentage | 3.00% | ||
Contribution amount | $ 0 | $ 2,200 |