What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-04-16 compared with 2023-07-14 · 116 added, 66 removed, 223 unchanged (45% of the section changed)

MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our Common Stock is quoted on the OTCQB under the symbol “MITI.”

On June 8, 2023, the price of our Common Stock as reported on the OTCQB was $0.94 and we have approximately 578 holders of record of our Common Stock, and approximately 7,000 shareholders including smaller holders and those with restricted shares not currently in the market.

Our Common Stock is traded on the OTCQB under the symbol MITI.

There is no established trading market for the Series A Warrants and Series B Warrants or any of our Preferred Shares.

Our Common Stock is quoted on the OTC Market (“OTC”) under the symbol “MITI.”

On April 2, 2024, the price of our Common Stock as reported on the OTC was $0.43 and we have approximately 500 holders of record of our Common Stock, and approximately 7,000 shareholders including smaller holders and those with restricted shares not currently in the market.

Our Common Stock is traded on the OTC and the symbol MITI.

There is no established trading market for any of our Preferred Shares.

DIVIDEND POLICY

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The Series X has 400 votes per share and votes with our Common Stock.

As of June 8, 2023, the outstanding Series X Preferred shares was 24,227.

Each share of Series C Preferred Stock accrues dividends on a quarterly basis in arrears, at the rate of 6% per annum of the Stated Value and to be paid within 15 days after the end of each of our fiscal quarters.

The Series C Preferred Stock along with the Series D Preferred stock ranks senior to all other preferred stock of the Company except in relation to the Company’s Series X Preferred Stock, which ranks pari passu to the Series C Preferred Stock, with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.

As of April 2, 2024 the number of X Preferred shares issued and outstanding was 33,589.

From late July 2023 until February 2024 the Company’s common stock was trading on the OTC “Expert Market” instead of the traditional OTC Quote system.

This change came as a result of late SEC filings creating non-compliance with certain standards.

Since the move to the OTC Expert Market trading volume and prices have been a fraction of the historical results for the Company’s common stock.

Because of the substantially lower price realized on the OTC Expert Market the holders of the Series X Preferred shares modified their policy on pricing of the restricted common stock used for the dividend payments retroactive to July 2023.

Until further notice the number of dividend shares will be determined using a price per share of $.80 in computing the number of shares to be issued.

This represents a 20% discount to the average closing price immediately before the trading of the common stock was moved onto the OTC Expert Market.

This change was approved by a unanimous vote of the holders of the Series X Preferred shares as of January 17, 2024.

Effective April 1, 2024 the Company intends to return to the dividend payment terms as defined in the Certificate of Designation for the Series X Preferred stock, as such the share price used in future dividend payment shall be determined using the closing price of the common stock on the 15 th day of each month, and the shares shall be issued quarterly to reduce administrative costs.

Each share of Series D Preferred Stock accrues dividends on a quarterly basis in arrears, at the rate of 6% per annum of the Stated Value and to be paid within 15 days after the end of each of our fiscal quarters.

The Series D Preferred Stock along with the Series C Preferred Stock ranks senior to all other preferred stock of the Company except in relation to the Company’s Series X Preferred Stock, which ranks pari passu to the Series C Preferred Stock, with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.

Holders of shares of the Series F Preferred Stock are entitled to receive, on each Dividend Payment Date, whether or not declared, set aside for payment or otherwise authorized by the Board of Directors, payment-in-kind dividends payable to the holder(s) of Series F Preferred Stock only in additional shares of Series F Preferred Stock (“PIK Dividends”) at the quarterly rate of three-hundredths (3/100th) of one share per outstanding Series F Share (equivalent to one-quarter (1/4) of 12% per annum per Series F Share) (the “Quarterly Dividend Rate”).

Equity Compensation Plans

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Recent Sales of Unregistered Shares

Common Stock Issuances in 2023

On January 23, 2023, the Company issued 150,000 shares of common stock at the market price of $3.19 per share to a service provider.

On February 21, 2023, the Company issued 150,000 shares of common stock at the market price of $2.27 per share to a service provider.

During the three months ended March 31, 2023, GS Capital converted principal and accrued interest in a convertible note payable into shares of common stock as follows:

On February 14, 2023, 9,846 shares were issued at a price of $1.74 per share;

on February 28, 2023, 13,555 shares were issued at a price of $1.50 per share;

on March 9, 2023, 15,265 shares were issued at a price of $1.50 per share;

and on March 28, 2023, 18,472 shares were issued at a price of $1.25 per share.

On March 31, 2023, the Company issued a total of 8,063 shares of common stock for accrued dividends on its Series X Preferred Stock.

Of this amount, a total of 1,066 shares were issued to officers and directors, 4,160 were issued to a related party shareholder, and 2,837 were issued to non-related parties.

On April 4, 2023, the Company issued 2,952 shares of common stock to a consultant at a price of $1.29 per share as a commission on funds previously raised.

On April 4, 2023, the Company issued 94,738 shares of common stock to GS Capital at an average price of $1.26 per share pursuant to a make-whole agreement entered into in connection with the GS Capital Warrants.

On May 5, 2023, the Company issued 2,552 shares of common stock to a vendor at a price of $0.85 per share, and on May 9, 2023, the Company issued 19,622 shares of common stock at a price of $0.85 per share to the Michael C.

Howe Living Trust (the “Howe Trust”), an entity controlled by a related party.

These shares were issued in satisfaction of a vendor dispute.

The shares issued to the Howe Trust were reimbursement for shares previously issued to the vendor by the Howe Trust with regard to this dispute.

On June 29, 2023, the Company issued a total of 20,212 shares of common stock for accrued dividends on its Series X Preferred Stock.

Of this amount, a total of 2,673 shares were issued to officers and directors, 10,426 were issued to a related party shareholder, and 7,113 were issued to non-related parties.

Effective June 30, 2023, the Company issued 2,926 shares of common stock at a price of $12.50 to a previous board member for the conversion of accounts payable in the amount of $36,575.

These shares had been carried on the Company balance sheet as Common Stock Subscribed.

On August 21, 2023, the Company issued 131,362 shares of common stock at a price of $0.80 per share for accounts payable in the amount of $105,089.

On August 21, 2023, the Company issued 43,750 shares of common stock at a price of $0.80 per share for accounts payable in the amount of $35,000.

On August 21, 2023, the Company issued 49,226 shares of common stock at a price of $0.80 per share for accounts payable in the amount of $39,380.

Effective September 29, 2023, the Company’s now former Chief Operating Officer and a board member converted a note in the amount of $18,750, accrued interest of $2,101, accrued salary of $64,434, and board of director fees of $60,000 (a total of $145,285) at a price of $0.80 per share into 181,606 shares of the Company’s common stock.

On October 10, 2023, the Company issued 23,438 shares of common stock to a service provider at a price of $0.80 per share for accounts payable in the amount of $18,750.

On February 9, 2024, the Company issued 41,057 shares of common stock for dividends payable on its Series X Preferred Stock for the period from July 2023 through December 31, 2023.

On March 20, 2024, the Company issued a total of 25,013 shares of restricted common stock for the payment of dividends due for its Series X Preferred stock during the first quarter of 2024 using the $.80 price per share as noted above.

Common Stock Issuances in 2022

On January 12, 2022, the Company entered into a settlement agreement with an ex-employee.

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On March 31, 2022, the Company issued 7,648 shares of common stock at a price of $12.50 per share which were previously subscribed for the conversion of accounts payable in the amount of $95,558.

On April 27, 2022, the Company issued 14,400 shares of stock to Cavalry Fund 1 LP as compensation for the waiver of certain covenants as set forth in the Series C Certificate of Designation.

On April 27, 2022, the Company issued 1,929 shares of common stock with a contract price of $12.50 per share or $24,118 and a grant date market value of $8.00 or $15,434 to Larry Diamond, it’s Chief Executive as commitment shares as set forth and defined in Diamond Note 3.

On April 27, 2022, the Company issued 14,400 shares of stock to Cavalry Fund 1 LP at a price of $6.35 per share for a total value of $91,440 as compensation for the waiver of certain covenants as set forth in the Series C Certificate of Designation.

The Company recorded a gain in the amount of $88,560 on this transaction.

On April 27, 2022, the Company issued 1,929 shares of common stock with a contract price of $12.50 per share or $24,118 and a grant date market value of $8.00 or $15,434 to Larry Diamond, its Chief Executive as commitment shares as set forth and defined in Diamond Note 3.

The Company recorded these shares at their relative fair value of the components of Diamond Note 3, or $16,200, and recorded a loss in the amount of $765 on this transaction.

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and the warrants were issued, with an initial exercise price of $12.50 per share, subject to adjustment.

On May 18, 2022, the Company issued 386 shares of common stock to Larry Diamond, it’s Chief Executive Officer at a contractual price of $12.50 per share and a market price at issuance date of $7.585 per share as commitment shares as set forth and defined in Diamond Note 4.

On May 18, 2022, the Company issued 386 shares of common stock to Larry Diamond, its Chief Executive Officer at a contractual price of $12.50 per share and a market price at issuance date of $7.585 per share as commitment shares as set forth and defined in Diamond Note 4.

The Company recorded these shares at their relative fair value of the components of Diamond Note 4, or $3,160 and recorded a loss in the amount of $249 on this transaction.

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The Company also issued five-year warrants to purchase 7,284 shares of common stock at a price of $25.00 to the May 26 Lenders pursuant to the June 9 notes.

On June 22, 2022, the Company issued 4,824 shares of common stock at a fair value of $10.45 per share to Dragon Dynamic at a fair value of $10.45 per share as a commitment fee.

On June 22, 2022, the Company issued 12,741 shares of common stock at fair value of $10.45 per share to GS Capital at a fair value of $10.45 per share as a commitment fee.

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This discussion contains certain forward-looking statements that involve risks and uncertainties, as described under the heading “Cautionary Note Regarding Forward-Looking Statements .” Actual results could differ materially from those projected in the forward-looking statements.

We are a holding company with current operating plans to participate in the healthcare industry through the development of healthcare services, and with a view toward additional services and technology that may find a ready market in the healthcare industry.

During 2022 we continued on our plan to open primary care clinics around the United States in select markets, utilizing the experience, expertise, and training of licensed, advanced degreed nurse practitioners (“Nurse Practitioners”).

In late 2022 we made a decision to discontinue our clinic businesses due to a lack of available capital required for their continued operation and growth.

We have always had a view toward additional healthcare technology and services offerings, and are committing more time to that effort going forward.

We are a holding company seeking to provide products, services and technology to make accessible higher quality, and more affordable healthcare solutions.

We have recently discontinued the business activities within “The Good Clinic, LLC” healthcare subsidiary due to lack of profitability.

We have a number of near-term opportunities that we hope to pursue, assuming the capital markets make sufficient funding available at reasonable rates.

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The application of these complex legal and regulatory requirements to the detailed operation of our businesses creates areas of uncertainty.

Further, there are numerous proposed health care, financial services and other laws and regulations at the federal and state level some of which could adversely affect our businesses if they are enacted.

Further, there are numerous proposed laws and regulations at the federal and state level some of which could adversely affect our businesses if they are enacted.

We cannot predict whether pending or future federal or state legislation will have an adverse effect on our business.

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We opened our first primary care clinic “The Good Clinic” in Northeast Minneapolis, Minnesota in February 2021, and added five additional operating clinics during 2022 for a total of six clinics open and operating at October 14, 2022 and three under construction (one in Wayzata, MN and two in Denver Colorado).

In December of 2022 we decided to close the clinics due to a lack of available capital to fund their ongoing operation and growth.

We have always had a view toward additional healthcare technology and services offerings, and are committing more time to that effort going forward.

In December of 2022 we decided to close the clinics due to a lack of profitability.

On December 8, 2023, the Company sold the remaining assets of The Good Clinic, LLC to Leading Primary Care LLC, a company organized by Michael C.

Howe, the former CEO of The Good Clinic, LLC for total consideration of approximately $2.5 million.

Consideration consisted of cancelling existing notes payable and accrued interest owed to Mr.

Howe in the amount of approximately $2.5 million.

The Company recognized a contribution to capital on this transaction in the amount of approximately $2.5 million as Mr.

Howe is a related party.

See the Form 8k filing of December 13, 2023, located here, for additional details:

https://www.sec.gov/Archives/edgar/data/802257/000118518523001292/0001185185-23-001292-index.htm

We have always had a view toward additional technology and services offerings and are committing more time to that effort going forward.

We have a number of near-term opportunities that we hope to pursue, assuming the capital markets make sufficient funding available at reasonable rates.

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Years ended December 31, 2023 and 2022

The Company recognized revenue of $0.7 million for the year ended December 31, 2022, compared to $0.1 for the year ended December 31, 2021.

The increase in revenue is the result of the opening of The Good Clinic’s four locations.

Cost of Sales

The Company incurred approximately $2.1 million of cost of goods sold for the year ended December 31, 2022, compared to $0.5 for the year ended December 31, 2021.

The increase in cost of goods sold is the result of the opening of The Good Clinic’s four locations.

Our gross loss was $1.4 million for the year ended December 31, 2022, compared to $0.4 for the year ended December 31, 2021.

Revenue and Cost of Sales

As a result of the Company closing the clinics in December 2022 and subsequently selling the related assets, all revenue and cost of sales have been reclassified to income(loss) from discontinued operations.

Operating Expenses

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there was no comparable transaction during the year ended December 31, 2022.

Other operating expense for the year ended December 31, 2022 were comprised primarily of $3.3 million payroll and payroll taxes, $1.3 million in legal and professional fees, $1.1 million in office and facilities expenses, $0.9 million in depreciation, $0.5 million of stock-based compensation, $0.5 million in consulting fees, $0.4 million in advertising, marketing, and investor relations expenses, and $1.2 million in other operating costs.

Client acquisition costs were significantly below target at $60 per new client versus the budgeted $200 per new client.

This was achieved due to the high rate of patient referrals of friends and family as well as lower than plan funding of advertising due to a lack of available capital.

In April of 2022 paid advertising was suspended.

For the remainder of 2022 operations, after advertising was suspended, approximately 50% of appointments were for new clients to the clinics.

Operating Expense for the year ended December 31, 2021 were comprised primarily of $1.4 million payroll and payroll taxes, $0.8 million of non-cash compensation, $1.1 million in legal and professional fees, $0.6 million in marketing expenses, $1.0 million in office and facilities expenses, $0.6 million in consulting fees and $1.3 million in other operation costs.

Other operating expense for the year ended December 31, 2023 were comprised primarily of $.9 million payroll and payroll taxes, $.4 million in legal and professional fees, $0.9 million of stock-based compensation, $0.2 million in advertising, marketing, and investor relations expenses, and $.1 million in other operating costs.

Operating Expense for the year ended December 31, 2022 were comprised primarily of $1.2 million payroll and payroll taxes, $0.6 million of non-cash compensation, $1.1 million in legal and professional fees, $0.2 million in marketing expenses, and $1.2 million in other operation costs.

Other Income and Expenses

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Interest expense – related parties was approximately $0.4 million for the year ended December 31, 2023 compared to $1.2 for the year ended December 31, 2022.

The increase in interest expense was a result of the increased level of debt during fiscal 2022.

During the year ended December 31, 2021, we recorded a loss on a legal settlement of $0.1 million.

The decrease in interest expense was a result of the decreased level of debt during fiscal 2023.

During the year ended December 31, 2023, we recorded equity investment incentives of approximately $7.6 million.

There were no comparable transactions in the prior period.

During the year ended December 31, 2023, we recorded a loss on a legal settlement of $18,759.

There was not an equivalent gain or loss during the year ended December 31, 2022 prior period.

During the year ended December 31, 2022, we recorded a loss on true-up shares issued with notes payable in the amount of $9,007.

There were no comparable transactions during the prior period.

During the year ended December 31, 2023, we recorded a loss on true-up shares issued with notes payable in the amount of $119,370 compared to $9,007 for the year ended December 31, 2023.

During the year ended December 31, 2022, we recorded a gain on commitment fee shares in the amount of $0.1 and a gain on commitment fee shares issued to related parties in the amount of $0.1.

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During the year ended December 31, 2022, we recorded a loss on settlement of accrued salary in the amount of $15,032.

There were no comparable transaction during the year ended December 31, 2021.

During the year ended December 31, 2021, we recorded a gain on settlement of notes payable of approximately $1,836.

There was no comparable transaction during the current period.

There was no comparable transaction during the year ended December 31, 2023.

During the year ended December 31, 2023 we recorded a gain on settlement of notes payable of $25,000.

There was no comparable transaction in the prior period.

During the year ended December 31, 2023, we recorded a gain on sale of assets in the amount of approximately $9,000.

There were no comparable transactions in the prior period.

During the year ended December 31, 2023, we recorded other income of $40,622.

There were no comparable transactions in the prior period.

During the year ended December 31, 2023, we recorded a gain on issuance of shares to a service provider of $33,092.

There were no comparable transactions in the prior period.

During the year ended December 31, 2023, we recorded a gain on settlement of notes and accounts payable of $37,453 compared to a loss of $88,235 in the prior period.

During the year ended December 31, 2023, we recorded a gain on settlement of notes and accounts payable to a related party of approximately $0.1 million;

there was no comparable transaction in the prior period.

During the year ended December 31, 2023, we recorded a gain $25,000 for the conversion of accrued salaries and Series D Preferred stock into shares of Series F preferred stock.

There were no comparable transactions in the prior period.

During the year ended December 31, 2023, we recorded a loss on revaluation of derivative liabilities in the amount of $85,773 compared to a loss on revaluation of derivative liabilities in the amount of $687,178 during the year ended December 31, 2022.

Net Loss from Discontinued operations

During the year ended December 31, 2023, we recorded a net loss from discontinued operations of $4,221,334 compared to a net loss of $14,030,539 for the year ended December 31, 2022.

The net loss from discontinued operations were lower in the current period as the Company closed all of its clinics as of December 2022.

Net Loss Available to Common Shareholders

The Company accrued Preferred Stock dividends of approximately $1.7 million including approximately $0.1 million to related parties for the year ended December 31, 2023, compared to approximately $0.3 million including approximately $0.1 million to related parties for the year ended December 31, 2022.

The increase was due to accrued dividends on the Series F Preferred Stock.

For the year ended December 31, 2023, we had a net loss available to common shareholders of approximately $18.2 million, or a net loss per share, basic and diluted of ($1.26) compared to a net loss available to common shareholders of approximately $23.6 million, or a net loss per share, basic and diluted of ($5.29), for the year ended December 31, 2022.

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We have financed our operations through the sale of equity securities and short-term borrowings.

As of December 31, 2022, we had cash and cash equivalents of approximately $36,000 compared to cash of approximately $1.2 million as of December 31, 2021.

As of December 31, 2023, we had cash and cash equivalents of approximately $3,000 compared to cash of approximately $36,000 as of December 31, 2022.

Net cash used in operating activities was approximately $0.8 million for the year ended December 31, 2023.

This is the result of our business development efforts pertaining to the start-up our operations.

Cash used in operations for the year ended December 31, 2022, was approximately $5.2 million.

Net cash used in investing activities was approximately $1.7 million for the year ended December 31, 2022 compared to approximately $1.9 million for the year ended December 31, 2021.

This amount does not include approximately $4.5 million of capital expenditures included in accounts payable at December 31, 2022.

The amounts relate to the purchase of fixed assets and leasehold improvement on our first clinic.

The decrease in cash used in operations was a result of closing our clinical facilities in December 2022.

Net cash used in investing activities was $0 million for the year ended December 31, 2023 compared to approximately $1.7 million for the year ended December 31, 2022.

The amounts relate to the purchase of fixed assets and leasehold improvement on our first clinics.

Net cash provided by financing activities for the year ended December 31, 2023, was approximately $0.7 million, consisting of net cash proceeds of approximately 0.7 million from the sale of Series F preferred stock, offset by principal payments on the SBA loan of approximately $11,500.

Net cash provided by financing activities for the year ended December 31, 2022, was approximately $5.8 million, consisting of proceeds from a notes payable of approximately $4.4 million and notes payable – related parties of approximately $1.5 million.

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Partially offsetting the proceeds were principal payments on a note payable to a related party of was approximately $0.2 million.

We have made a strategic decision to reduce our capital needs by closing our clinic operations in the fourth quarter of 2022, and releasing a significant portion of our staff.

As we redevelop our new strategy for lower cost operations, we hope to slowly open clinics, using the same staffing approach, but with a wider range of services for a broader portion of the population with healthcare needs.

As of the date of this filing:

The Wayzata, MN clinic leases was terminated for a commitment to pay $25,000.

The two Denver, Colorado clinic leases, known as Quincy and Radiant, possession has been relinquished to the landlords.

The lease obligations remain in negotiations as does the handling of the mechanics liens placed on the properties.

The Eagan clinic, aka Vikings clinic, gave up possession in January of 2023.

The mechanics lien has been placed on the property was settled by the landlord in a confidential settlement with the lien holder.

Mitesco is now in settlement negotiations with the landlord for the handling of lease obligations.

Paul clinic possession was relinquished in March 2023.

The handling of lease obligations remain in negotiations as does the handling of the mechanics liens placed on the properties.

Louis Park clinic possession was relinquished in April 2023.

The handling of lease obligations remain in negotiations as does the handling of the mechanics liens placed on the properties.

The Maple Grove clinic eviction occurred in April 2023.

The handling of lease obligations remain in negotiations as does the handling of the mechanics liens placed on the properties.

The Northeast Minneapolis clinic, aka Nordhaus clinic, possession was relinquished in May 2023.

There is no lien on the property.

The handling of lease obligations remains in negotiations with the landlord.

Currently, we have the Eden Prairie, MN clinic.

It is closed.

If capital becomes available, we will work to reopen this facility.

If capital is available, we may reopen this location of The Good Clinic using a modified approach that emphasizes care for chronic illnesses and consumer direct services.

We may explore the sale of the Good Clinic concept as well.

The Company is refocusing its strategy on Mitesco’s original business focus of acquiring smaller health care technology companies that are at or approaching cashflow positive operations and can benefit from the expertise of the board and management, Mitesco’s access to public market capital, and the efficiency of purchasing services achievable within a holding company structure.

We have made a strategic decision to reduce our capital needs by closing our clinic operations in the fourth quarter of 2022, and releasing our staff.

The following table summarizes the status of our property settlements as noted above and the total settlement amounts as of the date of the filing:

ALSO KNOWN AS:

PROPERTY NAME/OWNER

ORIGINAL OBLIGATION

SETTLEMENT AMOUNT

TYPE OF SETTLEMENT

MINNEAPOLIS, MN

CASH PAYMENT OBLIGATION

DEFAULT JUDGEMENT

LOUIS PARK, MN

EXCELSIOR & GRAND

DEFAULT JUDGEMENT

CONTINENTAL 560

DEFAULT JUDGEMENT

MAPLE GROVE, MN

SETTLEMENT AGREE

DEFAULT JUDGEMENT

Our financial statements as presented in this filing reflect total liabilities of over $14 million, including certain reserves for potential liabilities related to ceased operations related largely to long term lease obligations and costs related to the construction of our facilities.

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An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and any changes in the assumptions used in making the accounting estimates that are likely to occur could materially impact our consolidated financial statements.

Revenue Recognition

Revenue Recognition during previous periods

The Company had no sources of revenue during 2023.

The following reflects its revenue policy during the periods from 2021 until the end of 2022.

On January 1, 2018, the Company adopted the new revenue recognition accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the ASC as Topic 606 (“ASC 606”).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity