Shital Mars - CEO Armen Karapetyan - Business Development Consultant

Hello everyone. My name is Shital Parikh Mars, I am the CEO of Progressive Care.

Today, we’re going to discuss a little bit about Progressive Care, who we are, what we do and the results of the most recent quarter and the previous six months. To quickly go over the Safe Harbor disclaimer, forward-looking statements except for historical information contained herein, the statements in this conference call are forward-looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently unreliable and actual results may differ materially. Examples of forward-looking statements in the conference call include statements regarding the payment of dividends, marketing and distribution plans, development activities, anticipated operating results.

Factors which could cause actual results to differ materially from these forward-looking statements include such factors as the Company’s ability to accomplish its business initiative, significant fluctuations in marketing expenses and the ability to achieve and expand significant levels of revenue or recognize net income from the sale of its products and services as well as an introduction of competing products or management’s ability to attract and maintain qualified personnel necessary for development and commercialization of its planned products and other information that maybe detailed from time to time in the Company’s filings with the United States OTC Markets. The Company undertakes no obligation to publicly update to revise any forward-looking statements whether as a result of new information, future events or otherwise.

So, to get started a little bit, I want to introduce all of you, some of you we know, some of you are new to hearing about the Progressive Care, who we are and what we do. Progressive Care is the publicly traded holding Company of a singular wholly-owned subsidiary called PharmCo, LLC.

PharmCo LLC was established in 2005, opened its stores in 2007 as a retail pharmacy. And since that time, it has slowly developed and changed into a healthcare organization that centers around the provision of pharmaceuticals.

So what that means is that we are much more than a pharmacy, we do much more than just dispense medications to retail clients, we go directly to doctors’ offices and clinics, long-term care facilities, charitable organizations, and we provide them with services that help them manage their patients as well as manage their drug therapies. So, other word that we’ve heard used to describe what we do is an accountable care organization.

And the reason that term is used for us is because we do a thing called medication therapy management. That allows us to monitor the compliance and adherence, and medication therapies prescribed by doctors to improve overall healthcare outcomes for the patient.

And because we are usually a singular point of contact for the patient on a monthly basis, we see the patient more than their physicians do. We are uniquely capable of providing services, not only to the patient but to the doctor as well and keeping them -- the entire system informed of the patient’s health situation.

So, some of the services that we offer in addition to MTM in addition to providing prescription pharmaceuticals is we also do custom compound where we create small batch compound for pain relief, diabetic neuropathy, erectile dysfunction and the variety of other disease states. We do that in a number of dosage forms including capsules and sprays and creams and ointments.

We also do 340B services where we provide pharmaceutical services to charitable organizations where they can manage the healthcare of their patients. So, a lot of this is centered around our specialty drug services, which is catering to HIV and AIDS patients, hep C patients, cancer patients, and patients with specific acute healthcare needs where they can’t just get general pharmaceuticals from any pharmacy, we offer free same day delivery twice a day to the South Florida area, and now we are expanding our delivery services throughout Florida by shipping via mail and courier service and UPS.

We are able now to dispense medications in a number of states. We recently received license -- out of state licenses to provide pharmacy services to the state of New York, New Jersey, Pennsylvania, Texas.

We have a resident license in the state of Florida and we also received notice that we can conduct pharmacy business in the state of Massachusetts without requirement of a specific out of state license. So, we are able to conduct business in the state of Massachusetts without a license.

And so, we are open to expanding there. We do have connections in the northeast corridor, New York, New Jersey, Pennsylvania, Massachusetts where we have marketing infrastructure already in place and are beginning to see prescription coming in from those areas.

We also have marketing staff in Texas. And as we get state license and other states, we will have marketing staff in those states, able to take advantage of these licenses.

And we are primarily going to use these licenses to dispense compound medications. It provides us the foothold into these areas where we can expand on our name and our brand, and see which markets are -- will be most beneficial from a greater presence where it be a physical location or enhanced services in those locations.

So that’s a bit of who we are and what we do here. And now, I’ll get into the mean of the results of our financial operations over the last six months.

So, if you haven’t seen it already, in the last six months we did just about $8.5 million in sales. In the second quarter alone, we did $4.5 million.

This is a 14% increase over just last period, and this is a 38% increase over the same quarter last year and 32% increase overall. What is driving the sales growth, a lot of it is coming from compounds we added, additional marketing staff, we have several new marketers and specialists who are promoting our compound business all over the country.

We also are doing a lot with doctors’ offices and physicians’ networks in large clinics. And what do I mean by that?

What’s happening recently is we have noticed that a lot of doctors are switching or being switched by their insurance companies from a fee for service model to a per capitation model. And what that means is that they get a set rate per patient that they see, and they would be entitled to bonuses based on their performance.

And their performance is judged based on health outcomes for the patients, how often they go to the hospital, how often are they readmitted, they do go to hospital, how compliant they are with their medication, how efficient the therapies that the provider prescribed are for the patients. And so, what we are seeing is a lot of doctors are switching to these what we call risk contracts, and they are ill-equipped to manage these contracts.

Now, what’s happened is we have had a track record of improving the performance ratings and standings of the providers we work with. And that word of mouth and that direct marketing that we have engaged in has allowed us to expand into other areas.

And we get requests now from doctors to come to their office and see what we can do to help them. And what that does for us is they send all of their prescriptions electronically or by fax straight to us; we deliver to the patient without the patient ever having to come into the pharmacy themselves, we deliver straight to them; and we monitor whether they are taking their medications, we monitor whether they are getting their medications on time, and we monitor what medications they are getting prescribed and whether it’s right for them.

So that’s allowed us to really gain our sales up a tremendous amount. We are well on track for the $16 million goal that we set for ourselves this year.

Cost of sales as a percent of our revenue has remained steady around 25%. And our gross profit margins have decreased a little bit since the same period last year, and a lot of that is due to decreased reimbursement rate on compound and medications.

Overall, since we began compounding, our gross profit margins are up. We have increased our operating expenses, not as of percent of revenue but in general, and a lot of that is making investments into the Company.

As we’ve seen the growth, it’s not enough for us to just let cash live, we want to be able to expand and grow. We have added new personnel.

We have added new desks and machines. We are expanding our presence in the investment community doing conferences and travelling and travelling and road shows and things of that nature to increase our visibility and increase the value to shareholders who want to see us be more transparent with the shareholders.

So overall, and as far as profit and loss is concerned, we are seeing increases in our profitability. And I like to remind everybody, this is the first year of consolidated profitability that the Company has ever had since its been public.

Last quarter was the first quarter about a $100,000, we added another 100,000 in this quarter. So, we are sitting at about $220,000.

And we are using that positive profitability, positive earnings to enhance the growth and development of the Company. To get further into, our balance sheet is clean at the moment.

We did secure a funding partner through Chicago Venture Partners, and I’ll discuss a little bit later what that deal comprises. But, what we found in them is a partner that sees our vision for the Company and is willing to finance our growth and development, not just the organic growth of PharmCo by itself but also finance acquisitions and mergers as we identify the most beneficial target in the future.

So right now, our balance sheet is clean, there is no derivative or diluted securities, but obviously with the Chicago Venture deal in the third quarter, there is opportunity for dilution from the convertible note that we executed with them. We have positive cash flow for the six months ending June, we added about $160,000 to our cash flow.

At any given time, we have about $0.5 million on hand. So, our cash flow is enough to sustain it organically.

If we went from 18,000 prescriptions to 20,000 to 21,000 or 22,000, we can do that with the cash flows from operations that we have. We don’t require additional funding to support our growth in that way.

We have -- I am proud to say that a lot of our cash flow is not through seeking financing or notes or expanding on our payables or things of that nature, we’re seeing that we are having operating positive cash flow, and that’s allowing us to meet all of our immediate needs plus provide for some of our future needs. And as we move forward, we continue to see that we are having positive cash flow.

And we’re seeing that we are able to save a certain amount for things like developing and expanding into our warehouse space, possibly using funding and either from our operations we have a funding that we received from Chicago Ventures to build out a clean room and venture into sterile compounding and get into other healthcare spaces either to establish our own businesses or to acquire or merge with other businesses. So, as we look at the performance of the Company as a whole, we are leaps and bounds ahead of where we were a year ago.

A year ago, we were executing 3(a)(10) transaction, we were eliminating $2 million in debt. And because of the success of the fundamentals of the business and how well we are operating this entity and how efficiently we were able to execute the 3(a)(10) transaction with any year and not issue as much stock as we originally had anticipated, and that resulted in the return of nearly 12.5 million shares in the beginning of this year that weren’t necessary to be sold to cover the credit reliabilities that we had outstanding.

So, I am very proud of where we’ve come. And I want to talk a little bit about our goals and where we are headed and the position we’re in going into the next two quarters, which are our two busiest quarters of the year.

And at the beginning of the year, we set out to do $16 million in revenue, we wanted to do over 20,000 or over 21,000 in prescriptions per month. We had a high of 18,500 prescriptions per month just in March, and we were very close to that number in June.

And we believe that now as we’re seeing increased demand from doctors’ offices, from clinics, from long-term care facilities, we’re just waiting for our warehouse to be built to be sending us more business that our revenue growth and our earnings growth will only expand. So, we are very optimistic going into the next two quarters.

We are already outpacing our goal, if you annualize $8.5 million till the end of the year, we’re at 17 and we believe we can exceed that by the end of the year. And I also believe that we will be able to meet our goal of providing positive consolidated earnings for the entire year as a whole, even though we are using funds to continually invest in the Company and expand and be able to realize benefits from our momentum.

A lot of the things that we are doing as far as getting license in states, we have six licenses already, we have several licenses pending in Colorado, Georgia, Illinois and others. And as you know with any bureaucracy it just takes time.

And we expect to be receiving those licenses and be able to begin marketing in those areas, and we want to expand to the entire nation and expand the PharmCo brand throughout the country. So, we are very excited and optimistic about that.

We are moving toward -- we have done -- reviewed financial for the first six months of the year, we did it for the first quarter; we had our financial reviewed again for the second quarter. We are moving toward audited financials, whether that’s going to be beginning for the close of this year or the beginning of next year, it’s uncertain at this time.

But, we are moving towards it. We believe that we will have an observed inventory count this year in preparation of doing audited financials.

So, we are looking to begin that process. And part of that will allow us to uplift the OTCQX and get off the PINK.

And then, ultimately, we want to uplift and begin becoming fully reporting with the SEC that has always been the goal. And we are achieving all of our objectives to meet that goal in time.

As we look at the end of the year, we want to be able to say that our compounding division is 30%; right now, it’s about 25% of our business. We want to be well diversified.

And we also want to get into other healthcare spaces. One of the common themes that we talked about at the conferences and in the road shows, and our meetings with investors is that we want to expand what Progressive Care is, we want to define new forms of healthcare.

And we believe that we are best stewards to do that, because we understand the gaps that are currently there in the healthcare system. So, we see opportunities to become a management service for doctors’ offices, we see opportunity also in home health care.

I know that we had released the statement about the new rules in home health care. And so, as we see how that pans out in October, we will see whether that is a venture that we still want to go into.

And also, we want to get into outpatient clinics or urgent care centers. And there is a lot of opportunity for Progressive Care to expand and still take advantage of the healthcare ecosystem that we have established for ourselves as a pharmacy, as an accountable care organization, as a healthcare services organization.

So, that’s really where we are. And I know that a lot of people are looking at what’s going on with our permitting situation.

We have been waiting very patiently. We have met all the requirements of the city -- or of the county rather, and we are now just waiting on the city to stamp the document and issue the permit.

We expected it within days of the -- county is giving us approval and we are still waiting, but there is not issue, there is no problem that needs to be resolved, it’s just a matter of the bureaucracy getting through the paperwork. And as soon as we have the permit in hand, we are ready to do construction.

And as a matter of fact, next week, we are doing a little bit of remodeling in our store just to get ready for the new personnel and the new activities and the new work flow for the installation of the automated system -- the pharmacy automated system that we have coming. And we have this [ph] ready, all we need to do is build after that and they can install, we are going to get trained on it and then we can begin accepting all of that long-term care business that is just waiting for us.

So, that’s where we are as far as all of the objectives that we have set out. And I believe we are well-positioned to grow and continue delivering growth and development and value to our shareholders.

And so, now, that will conclude my analysis of the quarter so far. And we can begin our question-and-answer portion.

So, I do have a few web questions, some of them I already touched upon in my remarks. But, I’ll address the $2 million financing from Chicago venture partners.

That financing is available to us in tranches, and we did take on the first $250,000. While we don’t need it for the organic growth of the Company, we did see an opportunity to use that funding to build out our expansion phase, so that we don’t have to use our operating cash flow.

And then also with the possibility of getting accredited as a sterile compounding facility, so there is going to need to be some additional construction for that, and we are going to look at the permitting process for that and the accreditation process for that. So, that’s really what we intend to use the first tranche for is doing that expansion.

And then, as we look at the rest of it where we have $1.75 million available to us, they are open to financing our acquisitions and our merger targets. And so, we do identify the most profitable, the ones that we can execute on our objectives in more or mediate sense and what makes financial sense for us.

So, we are really excited about that financing opportunity with them. We also had a question about uplisting.

Right now, we are OTC PINK Current, and we started being OTCP PINK Current in this year. So, I do consider that a major achievement in this year and that our financials are always filed timely.

It is a comprehensive document. If you look at a lot of OTC PINK companies, their documents are just a few pages of statements and notes, and we provide a 41-page document with disclosures and analysis.

So, it is very in-depth and it provides a full range of information for investors to analyze and look at our business. And we’re proud of that.

We like to file as if we would be SEC reporting as that is the ultimate. And we can use these financials going forward.

And we believe that they would withstand any audit that we would put them under. And so that’s the next step.

It’s possibly uplisting to OTCQX in the near-term and then uplisting to either to NASDAQ in the longer term. So, let’s take some audio questions.

Hi, this is Jim Boose. [Ph]

Hi, where are you calling from?

Wisconsin. Thanks for having the conference call.

I was encouraged, the financing seems like a good arrangement for a Company of that size. But in the press release, it was noted that it would be used for working capital as well as expansion efforts.

And I like that you pointed out that the Company would be able to survive organically. Could you elaborate on some of those expansion efforts that you are…

Yes. So, right now, we are expanding, a lot of it entails to the expansion into the warehouse space.

And we’ve talked extensively about that over the last six months. Right now, we can’t bring on any more long-term care business until we build out the space.

We believe it’s going to cost about $200,000 to get that done. That includes putting in the offices and the work stations and everything else that goes into that.

We are also looking at a accreditation. And one of those things that to get accredited as a sterile compounding facility is we need a negative-pressure room.

And so right now, we only do non-sterile, which is creams and ointments and oral tablets and capsules. And what we want to do is get into injectables.

And so, building out a negative pressure room is an undertaking to say the least. So, we believe that with the financing we secured and with the first tranche and possibly taking on a second tranche, we’ll be able to build out that room.

But working capital wise, it’s really more in furtherance of that expansion. We’re talking about furniture; we’re talking about personnel; and the increased amount of inventory; the increased amount of marketing and advertising that’s going to go into when we ramp up our long-term care business, putting in all of the storage and everything else that goes towards expanding into the space.

So, that’s really what that’s for. It’s not necessarily to meet our immediate obligations right now, if we didn’t do anything.

We can pay our bills and then so we are fine in that way. So we don’t need it to pay down our current payables as far as those [ph] or anything like that.

So that’s what that’s for.

Great answer to the question. And if you see the name Instatrader that’s just a [technical difficulty] looking forward and out to the company whenever I can.

You’re doing a great job, it’ll make you great again?

Thank you. I don’t actually know how to respond to that.

But, thank you.

[Technical difficulty] keep the profit pouring in.

Okay. I think we have another question.

Hi, good afternoon and I appreciate the conference call. It’s pretty rare to see that for me over the current stock.

[Ph] I have a quick political question. Do you foresee any issues or do you have a plan for future the legislation towards the healthcare system where we have two candidates now, two different views, one of them being a free entrepreneur, the other being continuing the same path.

Do you have a plan in place for any scenario in the future that would have the business to maybe have shifts any way?

Sure. And I’d like refrain from getting into it too politically.

Businesswise, anything that increases the number of insured is better for us. Because one year when a patient is insured, they are more likely to access their healthcare system, they’re more likely to take their medications on time, they are more likely to have better health outcomes.

So, what we want is if the free market system is eliminating barrier to interest rate trade on the insurance companies and the plans offers is better for that, then that will go forward; and if it’s not, then that not will go forward. And so, what want is really the healthcare as a whole, it needs to evolve.

Now, whether either candidate gets into office, as you know, there are obstacles to getting anything passed legislation-wise. So, I am not anticipating a major shift where all of a sudden certain individuals will be dropped from their insurance or a vast number of individuals are going to suddenly be enrolled in insurance.

So right now our plan is to pursue any avenue where we can either through our own efforts or taking advantage of political efforts, to increase the number of insured and increase the number of people accessing healthcare for their benefits.

Okay. Because I’ve experienced actually in the past couple of years a lot of changes to Obamacare, now currently on Medicaid and there as there a lot of obstacles with insurance companies, so I just wanted to make sure that that is not a concern in the future.

So, thank you very much for the answer.

Yes, we are not expecting Obamacare to go anywhere. And yes, things have changed dramatically, but it hasn’t impacted us extremely positively or negatively.

We just view it really in the sense that it is positive and that more people are insured.

Hi, Ms. Mars, good afternoon.

Alex Bridges [ph] here calling from Texas. Well, first of all, congratulations on this amazing quarter and your year-over-year number is so fantastic.

So, the question, you mentioned that your goal is to fill 21,000 prescriptions a month. And so it sounds like you have been hitting 18K in March and then in June, so 21K is not so far ahead, right?

Is 21K your limit and what happens when that number is hit? Thank you.

No, 21K is far from our limit. Actually, once we get the automation system installed, we can increase up to 25,000 to 28,000 prescriptions a month without absolutely needing to increase the number of personnel doing filling.

Now, we probably might need to increase the number on bill pack but we won’t need to increase the number of fill personnel that we need. So, it’s definitely not our upper limit that just is our goal that we set for ourselves this year given the trends that we have seen in our growth over the past three years.

We always do see because of our efforts and our diligence that we have year-over-year, period-over-period sales growth and prescription growth. So, once that number is reached, we just keep going from there, we just keep adding from there.

What we do see is that 21,000 prescriptions is really one clinic or a couple of long-term care facilities away. We are not -- it’s not a goal that is too far away for us, we just need to reach it.

And what’s really happened, the reason we are hitting 18.5 and kind of held there for the last three months is the first two quarters are really our slowest months. The first quarter we have what we call deductible season.

So, a lot of people are now getting -- taking advantage of their health plans in the first quarter of the month as they meet their deductibles, they wait until they gets more expensive medications, they wait on surgery use until after that. So, all of that waits until after March.

Now, in a lot of our patients because we are in the South Florida area, a lot of our patients travel during the summer. They’re in New York, they’re visiting family and they are not here.

So, now that school has started and we are going into the fall and the winter, these are really our busiest quarters and we believe that we are well on track to meet our 21,000 goal and then we just keep going from there.

Absolutely, I am really happy to hear your answer to that question too. Thanks.

You are welcome.

First, I’d like to apologize, it’s my last question, but it’s feel better. [Ph] I know you can’t get into like specifics about what’s in the future, but just about when the acquisition you had before went away, and I know you can’t say like what exactly is coming up.

But I am sure I want to know if there is any -- because you’re deep into -- the prices out there is waiting for some to be signed or whatever and then [indiscernible] law change and that what as profitable anymore? What are the ones that you are currently actively in discussions or negotiations that you are looking at or still building a list?

I am actually going to turn it over to Armen Karapetyan, he is our Business Development Consultant, and he actually is one of the original founders of PharmCo let him answer that question for you.

Hi, James. How are you?

Thanks a lot. How are you?

I am good, I am good, thank you. So, going back to the acquisitions that we were planning on, we have changed our plans due to the changes in the rules and business itself when it comes out to home healthcare services companies.

As of October 1st, all of the business of home healthcare agencies is going on review where what’s called pre-approval I believe it’s called. So, in other words, we’re going to need to that each and every single agency is going to need to submit the paperwork for the claims while they are providing here without knowing that they are going to known to get paid for it or not.

So, we’re not comfortable with that. We’ve seen something like that before with the durable medical equipment, and that had a very extremely negative impact on the business as a whole.

And that’s one of the reasons PharmCo pharmacy for example exited the DME business. Now, going forward, it doesn’t mean that we’re not going to look at this business, we’re still awaiting what’s going to happen past this over first, how is it going to impact the business and then we’ll be making our final decision whether we still want to be going after it or not.

As far as other opportunities, we’re always looking at the opportunities. We are -- as Shital said, we’re looking at the opportunities of management, risk management, helping healthcare, practices, medical practices manage their risk and being able to actually earn the revenue, doing that.

We are not going to go and get the details but it’s more or less being in management tier organization or management services organization without being the MSO itself. But we’ll talk about it more in the press releases going forward when and if that happens.

But there is a lot of opportunities in the healthcare industry. We’re looking at several and we’ll keep you updated guys as it happens.

Thank you very much.

Thank you.

Good afternoon, Ms. Mars and Armen.

Just wanted to say, hey, I really appreciate your work and your efforts for yourself and all the management team and all the associates in building the Company to where it is today. I really appreciate this.

I had a couple of questions I wanted to run by you guys, if you don’t mind, and you’ve already kind of touched on them. And I just kind of want to get a little clarity.

There is a lot of smoke going on about in reference to the management decision to not to continue to pursue the acquisitions that were previously mentioned. I just kind of -- and Ms.

Mars, I think you mentioned the fact that the business interest is more in developing or if you will, enhancing the relationship between doctors and the providers and not really taking complete ownership, if you will, of the healthcare facility. So, would it be correct in saying that the Company’s focus is more on establishing or enhancing those relationships associated between the doctors and the patients relative to their prescriptions and managing prescriptions that’s more or less where your focus is?

It’s not solely on managing prescriptions. It is possible that we are talking about managing; there are therapies that that can go from -- that could be visible therapy; that could be doing referral that could be urgent care.

And we have not closed the door on opening our own healthcare facility. Right now, the reason why we are pursuing more the relationship side of the healthcare space is because it’s the most synergistic with what we do right now.

So, if we can enter into becoming a management or risk management company for doctors’ offices, it’s really easy for us specifically to realize gains from that business opportunity as opposed to taking two to three years to build out a new urgent care or a new clinic or something of that sort. We are really trying to think about areas of advancements where everything will tie together and also tie with the pharmacy as well.

Wonderful, and one more quick question if you don’t mind. You referenced to the Chicago Venture agreement.

Can you share your thought or your management team’s thought so far as entering into that agreement? And more specifically, it seems as if the repayment if you will is kind of kept at that -- that was at $0.03 to $0.05 range or something like that.

Can you share what your intent was for that and what impact that would have or could have for shareholders et cetera? Thank you.

Actually -- Charles, can you quickly repeat what you just said?

I was asking for a -- a little more clarity on the Chicago Venture agreement. I think within the agreement, there was a payback fixing [ph] that it was a range of shares being repaid if you will, I think it was a $0.03 to $0.05 range or something to that effect.

Sorry, I don’t have it right here in front of me. And I just wanted to know from the perspective of what impact that might have on the shareholders and the impact for the Company from your perspective so far as negotiate that type of agreement.

So really -- first of all what we can do, we can pay it off at a valuation of no more than $0.05. So really what they are looking for as true up.

So, it’s $0.05 they are making their interest back that’s trading. If the stock is trading anymore than $0.05, I don’t need to pay them anymore than that.

But, if it’s trading below $0.05, I need to be offering them at that rate at $0.03 or $0.035 or $0.04 whatever is, we’re trading at based on a 30-day average volume, average trading price. So what we want to do, we do have the opportunity to payback these note in cash if we like.

But, right now, the plan is to pay the notes in stock, but we are a year away from that. So, as we see the growth and see how it develops, it may be to just pay off in cash with the interesting and not dilute the shareholders any further, and in other circumstances it may not.

So, we are a year out from the repayment schedule and we’ll probably address with everybody at that time what our plans are.

I was wondering about the compounding business, when you expand to other states, what kind of marketing are you planning to use? I understand you have sales reps, but are you also going to expand on online business and compete positively with them or doing some other online pharmaceuticals company?

Honestly, online is the most inefficient way to us to gain business. We do a lot better by getting face-to-face with doctors.

We do a lot better by getting face-to-face with administrators. And it’s important for them to hear us, to see us, to see our team, to see our management, to see what services we can provide for them in real terms.

So, it’s not very effective for us to do any kind of -- not necessarily any kind of digital marketing, but it’s not our focus. And what we are doing is establishing our online platform, which will allow doctors or providers to be able to access their patients, so we can communicate with our doctors and our clients and our service providers through that medium and deliver more effective service.

But it’s not really a digital marketing or advertising plan, although we have established. We did tape our first commercial which will be available on our website and is airing in the South Florida market.

And we will continue to do more advertising in that way. But yes, it’s just a lot more effective to get… [Multiple Speakers]

Because I was wondering because like Macy’s or like the stores and Amazon that -- it seems like the model estimating like 20 years of do telemarketing and finally paying less. So, I am wondering if you plan to go in that as well.

Although currently it could be correct in saying that the face-to-face is more effective, but it seems like just looking at Amazon and what Macy’s is planning to do and some other companies going towards online business by -- so, I was just wondering if you…

Sheldon, this is Armen. We are not saying no to digital marketing, we are not saying no to the online sales, what Shital is saying that is we are going to use every single tool that we can to get -- to help the sales grow, to help the company grow.

But again, when it comes down to healthcare, you -- and especially when you talk about prescription medications, the more of it’s -- more and more of it is based on relationships. So, while we are going to continue focus on building relationships and networks, we will use the tool of the internet and online sales to help our business grow.

Okay, thank you very much and good luck.

Actually, I do have a question about closed-door pharmacy because I remember this is one of your 2016 goals. I am not very familiar with this industry, so can you elaborate a little bit about this closed-door pharmacy and exactly what they do and what kind of revenue it’s going to present to the Company and you expect for this year?

And are you still on track to achieve this goal for this year? Thank you.

I think the closed-door really is for a business-to-business type of model, so where we would deliver medication to a facility for them to further dispense to their patients, this is not us direct to the patient. So, this is really for our long-term care operation, this is for our assisted living facilities, nursing homes, rehab centers and institutions of that sort.

And what closed-door allows us to do is buy medications at a lower rate than as a retail pharmacy. So, when we put the facility in the back, once we expand into the back, we are going to separate that license, size a door away and say that all of our long-term care business is going to be conducted through the back part where no patients can actually walk in and speak to pharmacist because really this is communication between pharmacist and the doctor and the administrators of a facility, so that’s really what that is for.

And as far as revenue growth, we want to get to about a 1,000-bed service per month. And…

And that’s already included in our expectation.

And that’s already included.

Not a 1,000 beds included, but going forward.

Yes, that’s really already included in our revenue expectations for the year, and we couldn’t go higher than that.

So, you’re still on track to -- you’re confident you should be able to achieve this goal year.

I am fairly confident, especially once we ramp up our advertising and our communications with the facilities, we’ve already received interest from, and a lot of it is dependent upon executing on the expansion phase. So, we just need to get this permit to start seeing results.

And as we move forward and ramp up, we’ll definitely keep the shareholders apprised of the success or benefits we’re receiving from the long-term care, closed-door side.

And just to add one more thing, getting to a 1,000, to a number of a 1,000 beds is a process, it doesn’t happen overnight. But those revenue numbers and estimates whatever it is that, the Company -- the goals that the Company has set, will of course include the revenues generated or billing generated from the closed-door facility.

How much of it is going to be this year and how much of it is going to be next year, we’ll keep updating you guys on that. But it’s an incredible opportunity to have a closed-door license and to have a closed door pricing because just like Shital said, it’s lower pricing, better pricing than on the retail licensing.

Thank you.

Yes. My question is in regards to the risk management complicated portion of the business.

I work as a consultant in healthcare myself and I see often especially with the rural hospital associations where risk management and a lot of the news that you folks are participating in is a very high need. Is that one of the areas that we are talking earlier about pursuing?

And I also agree being in the space that it is very much so a personal relationship business, and how you gain relationships in networks within these facilities?

Well, yes, absolutely. That’s really what we are trying to do.

Honestly, we provide a lot of the service already. We just don’t charge for it.

We re-go to the doctors’ offices, we bring them a mountain of new reports, we tell them you want to get out of these formulary, you keep prescribing the same brand, you want to start prescribing these generics. These patients need different therapies, they are not compliant with these therapies because they’re complaining of side effects or there is some vaccines they don’t tell their doctor, they tell us, and we bring that to the doctor already.

And what we have done is we have proven to doctors time and time again that by us managing their patients -- and we can only manage it if we get everything. If they are sending patients to Walgreens and Walmarts and everywhere out, we can’t get the full picture until it’s too late.

And it doesn’t help them get control and take advantage of the bonuses by improving their performance if their patients are everywhere. So, they send them to us and we go and we communicate with the patients, we communicate with the caregiver, with the insurance company when they say we need a prior authorization, when they say that such and such drug isn’t covered.

We then go and tell them it has to be covered if we need to get authorization for because their patient can’t take a different therapy and they need to be compliant with their healthcare regimen. So that’s really where we are going and we are seeing a lot of opportunity to get into risk management as a business in and of itself, which will generate revenue for us.

It’s important for us to monetize a lot of the relationships that we have in the networks that we’ve built over the last five years throughout South Florida and the connections we’ve built with all of these doctors’ offices, and our ability to deliver a standard of service that is just leaps and bounds better than anyone else. So that’s what we are trying to do.

And I believe we have been successful in it, and we see that in our earnings and we see that in our revenue growth.

It’s an exciting space to be in. And we set double digit growth within our company and something similar running parallel to what you folks do and have seen a significant need that’s out there and how you go about marketing that is going to be exciting view or lens to be able to watch how you grow as a company in the future, excited to sit on the sideline and watch.

Thank you for taking my question. You mentioned on the call you were targeting Colorado as another possible state.

If you do enter Colorado, will it just be for prescription sales or will you also look into the medical marijuana space?

Right now we are using all of our out of state licenses to expand our compounded medication services as we are developing our brand name, developing our track record, developing our ability to show what level of service we can provide. However, we are looking into every avenue of healthcare.

And it’s important -- one of the things as important as we look at things like medical marijuana and even we’ve seen in Colorado where recreational use is legal. And that is important for marijuana to be removed as a Class 1 drug.

It is nearly impossible to achieve gains in our space as a licensed healthcare practitioner to be able to dispense medically, a Class 1 drug. So, once it is removed from that designation, which I think is pretty safe to say by all the chances, doesn’t belong there that we will be able to see some benefits from the becoming medical marijuana dispensary in any state regardless of where it is, where it is legal to do so.

Yes. No, it’s -- as you probably read and there is a lot of talk about the fact that marijuana is -- the DDA is looking into possibly moving it from Class 1 to Class 2.

It will change the markets drastically and of course create an enormous opportunity in this market for pharmacies like PharmCo and Progressive Care as a company.

So, I really wanted to say thank you to everyone who has been participating in the call and everyone who has been listening. I am humbled by the number of people who have reached out and looked for Progressive Care.

We are a family Company, a growing Company and we are community Company in South Florida, and we are proud of what we do and we are proud of the service and then exceptionally proud of our team. And I’m so excited that I’ve had this opportunity to communicate with our shareholders and the investment community directly.

And I look forward to doing it again. Thank you very much.