Mangoceuticals, Inc. — Form 8-K Summary
Reporting date: September 15, 2023; filed September 21, 2023. The filing reports material agreements with Epiq Scripts, LLC. Mangoceuticals is a Texas corporation, an emerging growth company, and its common stock trades on Nasdaq under MGRX.
Business Context and Material Agreements
- On September 15, 2023, the Company entered into a five-year Consulting Agreement with Epiq Scripts for pharmacy consulting services related to global expansion and other services requested by the Company.
- Epiq Scripts is 51%-owned by Jacob D. Cohen, Mangoceuticals’ Chairman and Chief Executive Officer, creating a related-party relationship.
- The Company also entered into a First Addendum to its September 2022 Master Services Agreement with Epiq Scripts, which covers online fulfillment, specialty compounding, packaging, shipping, dispensing, and distribution for products sold through the Company’s website and telehealth platform.
Financial Terms and Key Metrics
- The Consulting Agreement requires a one-time payment of $65,000, payable within 10 days after execution.
- The Company must also pay Epiq Scripts a per-pill fee for qualifying prescription or over-the-counter sales in territories outside the United States. The fee declines annually and applies only during the first five years of the agreement.
- No per-pill payments are due until the first commercial sale of qualifying prescription pills outside the United States.
- Payments are subject to equitable offsets for products that are refunded, charged back, returned, or reimbursed.
- If the Company transfers certain pharmacy services away from Epiq Scripts in a current jurisdiction, it generally must pay a non-use fee equal to 1% of gross sales of applicable prescription products generated from the transferred services. The fee applies for the lesser of five years or the remaining MSA term.
- The filing does not provide revenue, profit, cash flow, margin, debt, cash balance, liquidity, or other period-end financial metrics.
Changes Versus the Prior Comparable Agreement
- The First Addendum expands Epiq Scripts’ rights under the existing MSA, including rights of first negotiation and first refusal related to expanded pharmacy services, new jurisdictions, and internal provision of pharmacy services by the Company.
- The amendment adds the potential 1% non-use fee if covered services are transferred from Epiq Scripts in a current jurisdiction.
- The amendment provides exceptions to the non-use fee for services performed directly by the Company or a majority-owned subsidiary, services obtained from another provider in a future jurisdiction, and services provided in future jurisdictions.
- Epiq Scripts receives a right of first refusal regarding certain proposed fundamental transactions involving Epiq Scripts or its assets. Epiq Scripts must notify the Company within three days of receiving notice of a proposed transaction, and the Company generally has 30 days to exercise its right.
Outlook, Risks, and Unusual Items
- The agreements support the Company’s planned international expansion, but the filing provides no formal financial guidance or quantified outlook.
- The Consulting Agreement may be terminated for uncured breach, mutual agreement, or by Epiq Scripts at any time and for any reason upon written notice.
- The MSA has an initial five-year term and automatically renews for additional one-year periods unless timely termination notice is provided.
- The Company is subject to exclusivity and notice obligations that may limit its ability to select alternative pharmacy providers, expand services, enter new jurisdictions, or develop pharmacy capabilities internally.
- Epiq Scripts has audit rights over prescription-pill sales and may receive reimbursement for certain approved expenses.
- The one-time payment and future per-pill and non-use fees may increase operating costs, while the related-party ownership and CEO management role present potential conflicts of interest.
- Certain exhibit provisions were omitted as confidential under Regulation S-K Item 601 and may be furnished to the SEC upon request.
Investor Verification Checklist
- Verify the complete, unredacted financial terms of the Consulting Agreement, including the annual per-pill fee schedule.
- Assess the related-party nature of the arrangement with Epiq Scripts and the Company’s conflict-of-interest controls.
- Confirm whether the first commercial sale outside the United States has occurred and whether any per-pill payments have become payable.
- Evaluate potential exposure to the 1% non-use fee if the Company changes pharmacy providers in current jurisdictions.
- Review the full MSA and First Addendum for exclusivity, termination, renewal, audit, notice, and right-of-first-refusal provisions.
- Monitor whether the Company has sufficient liquidity to fund the $65,000 initial payment and ongoing expansion-related obligations; this filing does not provide liquidity information.