MANGOCEUTICALS, INC. 10-Q

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Unregistered Sales of Equity Securities There have been no sales of unregistered securities during the quarter ended March 31, 2023 and from the period from April 1, 2023 to the filing date of this Report, except as described below: On April 24, 2023, a warrant holder exercised private placement Warrants to purchase 100,000 shares of common stock with an exercise price of $1.00 per share in consideration for $100,000 in cash. The shares of common stock issuable upon exercise of the warrants were registered under the Securities Act. The Company issued 100,000 shares of common stock in connection with such exercise. 60 Table of Contents On April 24, 2023, a warrant holder exercised private placement Warrants to purchase 100,000 shares of common stock with an exercise price of $1.00 per share in consideration for $100,000 in cash. The shares of common stock issuable upon exercise of the warrants were registered under the Securities Act. The Company issued 100,000 shares of common stock in connection with such exercise. On April 24, 2023, a warrant holder exercised private placement Warrants to purchase 25,000 shares of common stock with an exercise price of $1.00 per share in consideration for $25,000 in cash. The shares of common stock issuable upon exercise of the warrants were registered under the Securities Act. The Company issued 25,000 shares of common stock in connection with such exercise. On April 24, 2023, a warrant holder exercised private placement Warrants to purchase 25,000 shares of common stock with an exercise price of $1.00 per share in consideration for $25,000 in cash. The shares of common stock issuable upon exercise of the warrants were registered under the Securities Act. The Company issued 25,000 shares of common stock in connection with such exercise. On April 25, 2023, a warrant holder exercised private placement Warrants to purchase 75,000 shares of common stock with an exercise price of $1.00 per share in consideration for $75,000 in cash. The shares of common stock issuable upon exercise of the warrants were registered under the Securities Act. The Company issued 75,000 shares of common stock in connection with such exercise. On April 26, 2023, a warrant holder exercised private placement Warrants to purchase 100,000 shares of common stock with an exercise price of $1.00 per share in consideration for $100,000 in cash. The shares of common stock issuable upon exercise of the warrants were registered under the Securities Act. The Company issued 100,000 shares of common stock in connection with such exercise. On May 1, 2023, a warrant holder exercised private placement Warrants to purchase 25,000 shares of common stock with an exercise price of $1.00 per share in consideration for $25,000 in cash. The shares of common stock issuable upon exercise of the warrants were registered under the Securities Act. The Company issued 25,000 shares of common stock in connection with such exercise. On May 1, 2023, we entered into a Software Development Agreement with Redlime Solutions, Inc. (“Redlime”) to provide software development services during the term of the agreement, which is for twelve months. In consideration for agreeing to provide the services under the agreement, the Company agreed to pay Redlime $300,000 in cash and issue Redlime 180,000 shares of restricted common stock. The shares were valued at $1.00 per share for a total of $180,000. The issuance described above was exempt from registration pursuant to Section 4(a)(2), and/or Rule 506 of Regulation D of the Securities Act, since the foregoing issuance did not involve a public offering, the recipient took the securities for investment and not resale, we took take appropriate measures to restrict transfer, and the recipient was (a) an “accredited investor”; and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act. The securities are subject to transfer restrictions, and the certificates/book-entry notations evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. 61 Table of Contents Use of Proceeds From Sale of Registered Securities On March 23, 2023, we completed our IPO, in which we sold 1,250,000 shares of common stock at a price to the public of $4.00 per share. In connection with the IPO, the Company also granted the representative of the underwriters a 45-day option to purchase up to an additional 187,500 shares of its common stock. We received aggregate net proceeds of approximately $4.35 million, after deducting underwriting discounts and commissions, and offering costs. We have used, and intend to continue to use, the net proceeds from our IPO for general corporate purposes, including working capital ($1,359,000, or approximately 31% of the net proceeds), to finance the marketing and operational expenses associated with the planned marketing of our Mango ED product (approximately $1,804,000, or 41% of the net proceeds), hiring additional personnel to build organizational talent ($902,000, or approximately 21% of the net proceeds) and capital expenditures for software development and maintenance ($287,000, or approximately 7% of the net proceeds). In addition, we may use a portion of the net proceeds of our IPO to finance future acquisitions or invest in complementary businesses, services, technologies or intellectual property rights. However, we do not have any agreements or commitments with respect to any such acquisitions or investments at this time. All the shares issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-269240) originally filed by the Company with the SEC under the Securities Act on January 13, 2023, which was declared effective on March 20, 2023. The representative of the underwriters of our IPO was Boustead Securities, LLC. Following the sale of all the shares upon the closing of the IPO and the expiration of the over-allotment option, the offer terminated. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business, and payments for the repayment of debt. There has been no material change in the expected use of the net proceeds from our initial public offering as described in our final prospectus filed with the SEC relating to the IPO on March 22, 2023, pursuant to Rule 424(b). The expected use of net proceeds from the IPO represents our intentions based upon our present plans and business conditions. We cannot predict with certainty all of the particular uses for the proceeds of the IPO or the amounts that we will actually spend on the uses set forth above. Accordingly, our management will have broad discretion in the application of the net proceeds we received from the IPO, and investors will be relying on the judgment of our management regarding the application of our net proceeds. While we expect to use the net proceeds for the purposes described above, the timing and amount of our actual expenditures will be based on many factors, including cash flows from operations, the anticipated growth of our business, and the availability and terms of alternative financing sources to fund our growth. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable.