All right. Welcome, everyone, to the first quarter 2020 quarterly report earnings call and business update.

We will be joined in a moment by Progressive Care's CEO, Shital Mars.

But first, let me read the cautionary statement regarding forward-looking statements. Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Such forward-looking statements reflect the company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. These statements include, but are not limited to, statements regarding the intended terms of the offering, the closing of the offering and use of any proceeds from the offering.

When used herein, the words anticipate, believe, estimate, upcoming, plan, target, intend and expect and similar expressions as they relate to Progressive Care, Inc., its subsidiaries or its management are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the company and are subject to a number of risks, uncertainties and other factors that could cause the company's actual results and performance, prospects and opportunities to differ materially from those expressed in this call.

For the full cautionary statement, you can find that in every press release for Progressive Care, Inc. using the ticker symbol RXMD.

I'm Stuart Smith at SmallCapVoice.com. I will be moderating and hosting the call today.

I want to thank everyone for sending in those questions. We will get to those questions in just a moment.

But first, let's welcome Shital Mars to the call. Shital, the call is yours.

Hi, everybody. Thank you so much for taking the time to join us today on this call.

It feels like since the last time I spoke to everybody, the world turned off, flipped upside down, got all shaken up, and everything is different. So I'm going to spend a little bit of time talking about the financial statements.

I know many of you are still trying to digest them. But I want to spend the vast majority of the time on the call today to talk about what's going on currently, what our plans are and all the initiatives that we have going on and all the ones that we've been working on.

So I want to make sure I have enough time for all of that. And feel free after the call to send any questions you may have about the financial statements or anything else that I may not cover in this call specifically.

So if you have the financial statements in front of you, we'll go through the balance sheet. Cash on hand was pretty good.

As of March 31, we had $705,000, and we had accounts receivable from insurance carriers. We also have accounts receivable, other.

That is the PBM fees from 1 specific PBM where we net off of the performance metrics, and we're receiving our PBM fees back. So we have that $672,000.

Keep in mind, as of -- and I said this in the call for the annual report, all of our pharmacies were rate 5-star. All of them met all of the measures, and that's a big improvement over June, where at 1002, our Palm Beach location, struggled because it had an influx of new patients.

So we did very well there. By the way, all of this money has been received in April.

Inventory is $992,000, and that's climbing a bit because we're getting a lot more business from infectious disease clinics. And so we've increased our inventory to accommodate that.

The property and equipment, a lot of that is fairly similar from the audited annual report. I'm not going to spend much time going into the details of each of these.

We do have intangible assets net that we are amortizing now.

So in the current liabilities, and you'll see there's some differences here, the biggest difference is going to be the derivative liability. That comes from the Chicago Venture notes and the Iliad notes.

We have been steadily paying those down through the issuance of conversion. As I said in December -- for the December call, our conversions have been very gentle.

And I can't thank Chicago Venture enough for doing that, especially in light of the current economic environment that they continue to be gentle with our notes. So that's been a blessing there, but we have realized we're doing this liability here.

We have the notes. We have the -- under the notes table, we have the building mortgage.

We have the down payment notes, and we have Chicago Venture in [ there as well ]. And we also have the robotic systems that we're paying off.

But we've paid off and we've made payments on that, and we're current with all of our liabilities. We haven't needed to take down any capital or use any capital for our operations, which has been fantastic so far.

We do know that with COVID-19, March, and I'm moving on to the P&L, March was substantially better because we did fill a lot of patients in advance in anticipation of COVID-19 quarantine. We were impacted in April.

So in April, as we saw that a number of doctors' offices, hospitals, clinics, health care providers locked or either closed their operating and limited capacity, doing very few telemedicine business, we understood that in order to be able to continue to keep all of our employees doing the strong work they're doing to test all these patients, we needed to apply for PPP loans from the government. So we did do that, and we received all of those funds in the end of April and in May.

And those have been disclosed. So what you'll see here in the March report, you won't see the PPP loans.

Those are going to show up on our June financial statements.

So in revenues, for the first quarter, we typically call the first quarter deductible season. And with the impact of COVID-19, we've seen $99 million in revenue.

That is a strong point for our financials, and those are net of DIR fees. So DIR fees have almost tripled in 2020.

We accrued about $330,000 of DIR fees that have not yet been taken from other remittances. And that's an important point to note because the total net loss here is $604,000.

The total amount of DIR fees charged in that quarter was around $643,000. So the entirety of our losses here can be summed up in DIR fees.

If that weren't part of our metrics, if that weren't part of our revenue, we wouldn't have these losses. And PBMs kind of know that.

I mean, I'm not going to spend too much time arguing about the merits of DIR fees. That can be a whole different conversation with me at a later point.

But please note that the loss includes that accrual, improved those DIR fees that, again, increased by 300% this year. They've all tripled.

So we'll see a bad debt expense that has increased from this same time period last year. The only reason that changes that is because we have an increase on the same-store operations.

This quarterly report for 2019 did not include Family Physicians RX. So you'll have bad debt expense that we're realizing their for Family Physicians.

And SG&A has also increased by a couple of percentage points here as it relates to revenue, also by bringing in FPRX into the fold here. We are dramatically pursuing increasing our foothold in the Orlando I-4 corridor area, and we're now working on moving further up into the state, Jacksonville/Tallahassee area.

The main reason for our move there is because we want to have full coverage of the entire state. So we've been working on all of the products and services we can offer to the Jacksonville area on top of looking for an opportunity to have any kind of brick-and-mortar in those 2 spaces.

So we will be looking at either an acquisition or some type of kiosk or small space trial pharmacy in those areas. So that's what we're planning on in the next 6 to 12 months.

So our capital structure didn't change by very much. We haven't issued really many -- really much stock or anything other than the Chicago Venture notes.

We converted, I think, about $500,000 -- $580,000 in notes there. So we've brought down our liability by that amount.

And so what you'll see there is issuance of stocks for that.

If we go to the statement of cash flows. Statement of cash flow, we were showing a net cash use in operating activity by about $50,000.

A lot of that, again, is due to the increase in DIR fees. The rest of it is pretty straightforward from the financing activities.

We didn't take any additional notes in the quarter. We didn't purchase any major equipment.

We didn't do any major changes. So most of this is in operations.

And again, in the June quarter, we'll have the PPP loans, which amounted to just over $1 million between 3 subsidiaries. And we are using that entirely for -- to support the payroll of our employees.

With this downturn and how many health care providers who are providing service to patients, we wanted to make sure that they all have full-time jobs and that they're able to stay in their position because we need them. Especially now, as of May 18, Miami-Dade and Broward counties will open up.

Orlando, Palm Beach has already opened as of this week. So we are seeing an uptick in prescriptions.

We are seeing some consolidation. One of the pieces of work that we did during this time period is because we have been known to have expertise in infectious disease, we went to every provider in our area, Miami-Dade, Broward, Palm Beach and Orlando-Orange County area.

We told every doctor that we are one of the premier pharmacy service organizations in the state. And that to protect their patients, they need to be sending their prescriptions to us and not necessarily putting their patients in a position to have to go wait in line even at a drive-through, even at a grocery store to pick up their prescriptions.

A lot of patients are getting delivery. The delivery is scattershot.

It's not very good. We've been known to do contactless.

We've been known to abide by the prescriptive sets of safety protocols. We've sent a lot of our administrative staff to work from home.

Our offices are now working -- our pharmacies are working on full shifts to limit the number of people who are in each individual space. So we're abiding by every guideline that there is.

And as a result -- so the point being that as a result, a lot of those physicians' offices, even ones that we had struggled with getting patients from in the past, have sent new patients. So from March 12 to the first or second week of April, we added 750 new patients in just 1 location.

And so that's been a major benefiting factor in the upswing that we should expect to see here in May, as all of our clinics and physicians' practices open back up. June should be even better, and we are working on a number of different revenue avenues here in the next -- in the summer and in the winter months, preparing for COVID-19 and preparing for the coronavirus to stick around for the foreseeable future.

So as you all know, pharmacy revenues -- general pharmacy revenues make up the vast majority of our sales, and it's about 98%. We did do about $200,000 in the quarter.

I think that's an increase of almost 100%, a little less than 100% over the same time period last year.

340B. We've added a number of new covered entities here in the April and May months, and we are expanding our delivery riders.

So we have a program now that allows us to deliver PrEP solutions. And for those of you who don't know, PrEP is for preemptive prophylaxis (sic) [ pre-exposure prophylaxis ] meant for HIV/AIDS.

And we are able to deliver those prescriptions nationwide. So we did -- we were able to work on that.

We've been able to mitigate some of the issues with HIV/AIDS medications being reimbursed below cost. So that's been a factor for the last 2, 3 years, where HIV medications were pretty consistently reimbursed below cost.

So we have been able to transition a lot of patients who would otherwise qualify to 340B to transition them to 340B clinics to get their medication, to get them cheaper for themselves and to be able to get better service.

So we have been able to work on a number of initiatives over the last several months. We don't -- regardless of coronavirus, we still have a business to run, and we have no interest in pretending that the world hasn't changed.

And one of the things that we've been very good at in the past is adapting and moving forward on a number of areas where we can provide innovative solutions for the future. We never seem to get caught in the problems of the past.

So even with coronavirus and COVID-19, we're probably one of the best positioned pharmacies out there, even better than Walgreens, CVS, even better than a lot of mail order because even mail order requires -- relies on doctors to be able to send prescriptions to their pharmacies. So you'll see massive decreases in pharmacy revenue across all the pharmacy industries.

And we have not had as big of an impact because of the work we do with infectious disease and how many patients rely on us for monthly maintenance meds. So we are much better positioned.

And because we haven't had that significant of a drop-off in revenue, we should be able to pick up here at the end of May and June.

A lot of the -- what I want to talk about as far as quarterly results and things that our investors and shareholders should focus on is, number one, that PBM fees play a major role. But a lot of our PBM fees can be returned to us.

So while we don't have performance metrics in which we can accrue a return of fee, understand that in the June period, we'll be able to make that accrual. And we should be able to make that accrual of how much of these PBM fees we expect to be returned to us.

So the losses we see here are preliminary. They should improve here over the next 9 months, the next April to December period.

So we should see massive improvement, and that improvement is going to come from a number of areas. And so this is where I want to talk about what we have going on to develop the company going forward.

And I want to get to a question-and-answer with Stuart, so I'm just going to touch on these very briefly because I know you guys have a lot of questions about these initiatives. But we have e-commerce.

We have testing. We have technology.

We have 340B. We have long-term care, and we have our specialized services like data management and coronavirus services, like contactless services that we've been gaining ground on, as well as we have a couple of leases up in December.

We have Orlando that will be moving to a larger facility. That should save us about 50% on delivery hubs for the Orlando area patients.

So we have a number of things that we're expecting to accomplish by December that will result in major savings here in 2021, as we build out the building and consolidate our own operations.

And with that, I'm going to go to Stuart to do questions. And then we'll continue with the closing remarks after that.

All right. Great.

Thank you for that, Shital. So I'm going to combine the first couple of questions.

And listeners, we always make this disclaimer. You send in a lot of great questions, but so many of you say the same thing and just word it a little differently.

But this is about the S-1 registration and the up-list. So does the company still plan to up-list to a major U.S.

exchange? And if so, what's the timetable?

And when will the company file an S-1 registration?

So we have already prepared our S-1 deck. We're dropping in a lot of the prospectus information, and that's going to take us a little bit of time.

One of the things I'm working on is a pretty robust investor deck instead of projections because it will involve a total evolution of the company. And some of the things that I have been focused on for the last year is transitioning our company more in the technology space because there are certain things we do better than pretty much anybody out there.

And data analytics is one of those things. Clinical management is one of those things.

Care and resource management is another one of those things. So we want to make sure that when we go to the SEC and the investment public, when we arrive on NASDAQ, we will be a fully transformed company moving in a direction that is in the 21st century and ready to realize the gain by having a superior technological platform can realize for us.

So we are building that deck. We are building those projections.

We are working with and trying to determine how our investment bank will be able to work on the S-1 registration and the up-list. We are looking at a substantial capital raise for the technological advances that we anticipate we want to accomplish in the next 2 to 3 years.

And so we're putting all of that together down on paper. That also includes the acquisition strategy that we want to accomplish in the next 12 to 18 months.

So that's the #1 thing with the S-1 registration. We should be done in the next couple of weeks with that deck and be able to deliver that to our bank.

We have them signed on to the reg release, so with the S-1, go through comments over the summer. And I believe we're looking to do the up-list and have the S-1 become effective almost simultaneously.

Now our bankers and our attorneys have informed us that, that is a possibility here at the end of the year, with an effective S-1 registration coming through in October or so. So that's the timetable we're looking at.

We still want to get this done by the end of the year. And I know that all of our shareholders are looking at the implications of what an S-1 and up-list require.

And what I would like to talk to each of them about with that is that we believe that as a management -- as management of this company, with $40 million in sales and a unique perspective on health care, that we're ready to be listed on a national exchange. And we look forward to working with our shareholders on proving to them that we're ready and proving to them that any concession they will make in regards to requirements for NASDAQ up-listing is to their benefit.

And we are taking into consideration every concern that they may have.

So over the next several months, we should be working with our shareholders on those requirements. We're looking at upgrading our Board members, so we have a more robust Board for the SEC registration and the up-list as well as all of the compliance requirements that go along with that.

But the timetable, again, should be this year.

All right. Here's another great question from one of your well-informed investors.

What's the current status on RXMD Therapeutics? When do you expect to start having sales on CBD products?

We are -- so RXMD Therapeutics, we are working on getting its banking relationship. We've had struggles in getting a banking relationship under RXMD Therapeutics because it does CBD.

We're looking at our local banks' opportunities where we can be able to have a fulfilling banking relationship, one that's not limiting to us. But the other strategy we have for RXMD Therapeutics, along with creating our line, it's partnering with an existing line for the manufacturing support.

And we have identified a target. We have reached out to them about potential partnerships and acquisition opportunities, and we are now waiting for their response.

I think that by bringing on board a reputable CBD brand into RXMD Therapeutics and building on an existing line will be much more fruitful. Also, it gives us the ability to taking -- take advantage of an existing compliance and banking apparatus.

So that's our primary goal right now for RXMD Therapeutics. We -- as we've tried to navigate CBD and how much we believe in it, it has become increasingly apparent to us that having CBD and the pharmacy as a support structure for each other is not viable because anything we do in CBD will damage what we do as a pharmacy.

And right now, the pharmacy is a core source of revenue. So we can't afford to take any risks with compliance on that.

So that's been the general track that we're trying to navigate now.

All right. PharmCo is Healthy Partners' preferred pharmacy.

How many of their patients are currently using PharmaCo's service? And what's your goal regarding gaining their business for this year?

So Healthy Partners has been a great partnership for us, a great relationship for us, and we don't have a financial stake in them. And so they've been -- the reason they've been transferring their patients to us over the last 6 months or so is because they've had issues with adherence and with compliance at pretty much any other pharmacy that they've used.

And that's not to put down really good pharmacies. But in order to have good performance measures, you need to have all of your patients with a good pharmacy.

So if one patient chooses a good pharmacy, it doesn't really help the health practice because you have thousands more who are noncompliant and nonadherent. So we have been steadily gaining ground.

I believe we're at over 1,000 patients now with Healthy Partners, and we're gaining ground there. One of the numbers that brought us -- so between March 12 and the middle of April, we added another 750 patients in 1 location.

We have another location that basically, due to coronavirus, has been switching a lot of their patients to us. So we expect to have significant increases in our business over the next 30 days, looking at 30%, 30% to 40% increases.

There are some patients, especially when a patient's choice -- who choose to use another pharmacy and we can't force them to switch. But for a lot of patients, when they start seeing the kind of work that we do for them, once they come to us, they don't go anywhere else.

So the patients that have switched to us, it is highly unlikely that they will then switch back to a chain pharmacy or a big-box store pharmacy. So we're making -- we're gaining a lot of ground.

To that end, and I know we've spoken about just Healthy Partners, this phenomenon is not isolated to Healthy Partners. We have a lot of MSOs.

A lot of physician groups, they use us, and we have been gaining ground on every single one of them. We are getting new patients.

So as they open up and now elective surgeries are opening in Florida, and as of Monday, all counties will be open at 50% capacity for dining establishments and 100% capacity for health care practices, we should be able to realize the gains on all of the work we've done over the last 45 days to get their business and have them isolate to us because they see the difference. And I can tell you those stories of what kind of difference that makes, but I think we'll save that for another venue, another opportunity.

All right. Excellent.

How's the company's new e-commerce business? The current e-commerce portal seems only to have some basic functions.

Do you plan to upgrade the portal to give it better design?

So yes, the answer is yes. Let's start with the upgrading projects.

We have wanted to do e-commerce for a couple of years now. And just by nature of having really busy schedules, securing acquisitions and doing implementations, doing integrations, we had not been able to execute on a strong e-commerce campaign.

But the coronavirus really has accelerated our desire to do e-commerce. And as such, we started with a simple design just to get the product out there.

All of our patients are relying on these. We're selling masks and hand sanitizers without price gouging or without big markups, and we want to make sure we're getting out to the community.

We're also donating a lot of these items wherever we see there's need. We've donated a number of things to health care providers in the community.

But our e-commerce has been doing really well without spending a lot of time on promotion and marketing. We've been getting a lot of orders through our e-commerce.

And we have a couple of designated really amazing people who have been working on the design, working on adding products. As you look at the e-commerce site, you can kind of see on a weekly basis that it changes.

Even now if log in, if you logged in a week ago, it looked different than it does today. So every day, we're making progress and making updates and making upgrades.

And we hope to have a full catalog of products in that shop soon, knowing that, that catalog of products we want to make sure is up to our standards of what we want to recommend and sell. So we're adding certain durable medical equipment products, vitamin supplements, over-the-counter medications, splints and back seats and things like that.

So everything that we sell in the pharmacy, you should be able to get through our e-commerce site soon. But we are uploading those a little bit at a time.

So check back in frequently to see what new things we have in there, and we hope to impress you guys over the next couple of months with a number of products that we're able to sell through there.

And we've been able to gain some pretty good business. I mean, our retail numbers are up.

I think they're up about 50% over the same time period last year, and that's even with coronavirus. So because we've had e-commerce supporting our retail operation, we've been able to add new retail sales and have more margins coming to the bottom line from the e-commerce side.

And one -- another thing that you'll see added to e-commerce is the COVID-19 antibody testing, and we have a number of strategies for that. I know that wasn't what you have asked about, but we are looking at marketing the antibody testing to the community in a variety of ways that allows employers and health care providers to provide the necessary testing and screening.

But -- I mean, pretty much every community in America needs those. But because South Florida has the highest percentage of cases in Florida, we want to make sure that our community is well covered on the testing front.

All right. Shital, that's all of our questions for today.

Listeners, please keep sending in those questions, and we will use them in an upcoming audio interview with Shital. Shital, it's time for your closing comments.

I wanted to talk a little bit in my closing remarks about the future of our company. I've alluded to a transformation over the last several months, at least the last year, as I have envisioned the new role for us to play in health care, a new role for us to play in how health care technology has developed.

And we are embarking on a number of different revenue streams for our company. 340B is one of them, where we're advancing in the data analytics space, providing third-party administration, providing compliance towards the 340B entities beyond just our dispensing revenue.

So that allows us to bring more revenue into the company, allows us to provide more robust data and ability for our covered entities to provide a different level of clinical support to the patients that they service. And we want to extend that out to all health care practitioners.

One of the things our health care practitioners are used to is getting reports from us, and we do that pretty much better than any other pharmacy out there. Everybody else lets you download data and analyze it yourself, so they won't provide you guidance.

And we do a lot of work in supporting the clinical strategies of our health care practitioners. So that's number one.

Number two is testing, and we've secured an allotment of testing. It's been a long road for us to secure testing.

We wanted to be providing testing when this whole crisis had begun, but the lack of PPE made that something that was untenable for our staff. We needed to make sure we protected their health and safety, first and foremost, before going into a testing strategy that could put them at risk and hinder the business at large.

So now that we have PPE, now that we have tests, we are going through and working with employer groups and health care practitioners to do testing. And I am working specifically on a strategy of doing a study in our area and working on gathering the partnerships we need to provide a robust antibody testing study in our locations to be able to support the Florida Department of Health in guiding its reopening process.

So that's -- those are in 2 places and as well as being able to provide testing in a safe, secure environment for anybody on a retail basis. So if you're in any of the South Florida area, Palm Beach, Broward, Miami-Dade County, you should be able to come into a pharmacy, come into one of our pharmacies and get an antibody test right then and there.

It takes about 10 minutes. And we give you safe, secure results that allows you to bring that to an employer who has requested some kind of antibody testing for you to be able to return to work.

And I know that a lot of employers are looking at testing as a way to provide safety and security for their patients and for their employees as they return to work and some as they stay at home, just to understand the prevalence of disease or presence of immunity amongst their staff. So we're providing that as a support service to employers and providing it to physicians so they can then be able to provide testing as patients start to come in and get their checkups.

Number three, we are working on the build-out. We have secured architectural plans.

Those plans are now in permitting. We're working on the bidding process.

We believe we can move in all of our operations here in December. So that means we are also working on keeping -- getting rid of a couple of leases.

We think that in 2021, our rent expense will go down by $300,000. Our total expenses associated with having off-site leases will go down significantly.

We also -- we will have a retail location, where we will have an off-site nonpharmacy with a pharmacy resource center within a retail location, where we can be able to sell, through e-commerce and through a direct physical location, CBD and holistic wellness products. So that is the goal of ours here in December, January, being able to build out a small retail space.

And it's not for the purpose -- I know that people are nervous about walk-in traffic. It's really more for the focus of supporting e-commerce, so providing the ability of local residents who are accustomed to walking in to be able to continue to pick up their prescriptions from their local pharmacies.

So that's what we're planning to do and be able to support our patients and to be able to greatly increase our retail and e-commerce revenues and margins. So we're working on that.

And another thing is working on additional states. We had paused our acquisition of state licenses for a period of time due to restrictions placed on us by PBMs, where we have found an avenue where having those state licenses will be beneficial to us now that we have our e-commerce platform and to be able to do -- use mail order in certain specialty products nationwide.

So we will be getting those licenses in more states. We are exploring a number of different states.

California has kind of been one that I've been wanting for a period of time. It takes about a year to get California.

So we are working on the application process now and working with our pharmacists on getting credentials in a number of states. So that's going to take some time.

But we are, again, ramping up on getting more state licenses. We are also working on our accreditations for our new building and for our pharmacies.

So you should be expecting a lot of evolution at the pharmacy level as well as a lot of evolution at the administrative level.

And this is all on top of doing the S-1 and doing -- analyzing our acquisition strategy, working on a number of acquisition targets and working on the business plan and model for a future capital raise, so that we can be a NASDAQ company with at least $100 million in revenue. We think we can get there.

We've gotten -- for a lot of people that don't know us, we started as a low-sales mom-and-pop store in North Miami Beach. We made our first sale on July 11, 2007.

First sale was nothing. We started from nothing.

And after a long period of time, where you're working on almost 13 years, we've grown nothing to $40 million, 120 employees, publicly traded. So there's nothing this company can't do.

There's nothing this company can't accomplish. And on top of that, we -- if we're all going to accomplish it, we're going to do it better than anybody else has ever done it.

So we knew there's a lot to look forward to from us. There's a lot of news coming out in the next 45 to 60 days about our testing products, about our e-commerce, about telemedicine and about CBD and all of the other projects you've seen us work on as well as a number of others that you haven't heard us talk about today.

So I think there's a lot to be excited about here, and there's a lot to be optimistic about.

It's really hard right now. I know a lot of people are struggling.

A lot of people are nervous. The economy is in a very desperate place.

But our company is designed for a crisis. Our company is -- strives and thrives in moments where patients would need advanced care, and now is one of those times.

And I believe that we play a pivotal role. We play an essential role in not only how Florida reopens but how the nation can reopen as well.

00, that is May 19, to be able to talk to everybody about coronavirus, reopening strategies, testing, masks. Whatever questions you may have, please join me at my Facebook live event on May 19 at 1:00.

And I hope to continue to speak with you, and me in Stuart can hopefully get a subsequent interview put together so we can answer any additional questions that you may have.

All right. Thank you, Shital Mars, CEO, once again, of Progressive Care.

Of course, you know that if you're on this call, and you also know the ticker symbol is RXMD. Once again, on behalf of the company, I would like to thank everyone for sending in their questions and joining us on this call today.

Have a wonderful weekend.