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Presidio Health, Inc.

Min. $500,000 and up to $3,000,000

Min. Investment - $10,000

6.0% Series B Non-Participating Convertible Preferred Stock

Pre-Money Valuation $10,000,000

Watch Presidio's Intro Video (3 min watchtime)
  • Proprietary, turn-key SaaS healthcare data platform to optimize a provider’s patient billing processes

  • Scalable Artificial Intelligence coding automation platform multiplies work efficiency

  • 24 healthcare provider clients (~350 Daily Active Doctors) - continuing technology development - growing new-client pipeline

Presidio Health, Inc, (the “Issuer” or “The Company”) is issuing a min of $500,000 and up to $3,000,000 in Series B Non-Participating Convertible Preferred Stock (the “Securities” or “Series B Preferred”) to provide growth capital and support a pivot with a focus on a scalable AI coding platform.

By registering with Carofin, Members have access to more extensive due diligence materials, additional private investment opportunities, and can proceed with making an investment.

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Investment Overview

1) Purpose of the financing

  • Growth capital supporting the continued development of Presidio’s Coding Automation Platform PerformMD™ and building out its AI automation engine, SuperChart™

  • Use of funds will primarily be used for expanding the Development for improved scaling and versatility of current AI Coding Platform, with enhanced support to service the growing customer base.

2) Issuer – Presidio Health, Inc. (Presidio)

  • Developer and provider of a proprietary SaaS Medical Record Coding platform that streamlines the capture of healthcare service billing codes by both reducing manpower costs and increasing reimbursement for Healthcare Provider customers.

  • Presidio currently has 24 clients (~350 Daily Active Doctors) within the U.S. emergency care outpatient market.

  • Founded in 2003 by Douglas Evans MD, MPH, continually improving its service offering throughout this period.

3) Security Description – 6.0% Series B Non – Participating Convertible Preferred Equity

  • 6.0% Series B Non-Participating Convertible Preferred Stock - Investors are entitled to either (1) the original purchase price plus accrued dividends plus declared and unpaid dividends on each of the Series B Preferred OR (2) if greater, the amount that the holders of the Series B Preferred would receive on an as-converted basis.

  • Minimum of $500,000 and up to $3,000,000 representing a minimum of 4.76% and up to 23.08% of the Company’s fully diluted, as-converted ownership.

4) Repayment

  • Potential capital gain following the sale of the Company, IPO or recapitalization. These returns cannot be guaranteed.

  • Investor distributions, if made, will be made first in the following order: 1) to satisfy the preferences of the B Preferred Stock (as noted above), to the A Preferred Stock and, thereafter on an ongoing basis, pro-rata to common stock ownership.

  • Active healthcare IT M&A market –acquisition valuations in the 5 – 15X revenue range. These returns cannot be guaranteed.

5) Investment Risks

  • Presidio Health’s business success is highly dependent on 1) the further development of its coding automation services, 2) significant growth in customers, and 3) successful delivery of its services to its customers.
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Why We Like This Investment

Business Opportunity

Significantly improve healthcare billing processes

  • Capturing the many details of medical patient treatments for billing purposes is a major challenge within the healthcare industry [recorded in the electronic medical record (EMR) as vital signs, complaints, physician activities, medications given, lab test orders, etc.].

  • Doctors and nurses typically transcribe medical visit treatments into their EMR system which then produces chart detail in a “flat file” format.

  • This report is then manually converted by billing offices into the data file formats used for processing associated billings and reimbursements.

  • This error-prone manual conversion process requires many staff hours (high FTE costs) and poor quality, which can result in significant (up to 20%) unrealized billings by the healthcare providers.

Company Solution

Replace manual medical bill coding with AI-based processing automation

  • Presidio Health, Inc. (“Presidio”), a healthcare SaaS technology company, replaces high cost manual medical record data extraction with its automation technology (AI or Artificial Intelligence) applications resulting in dramatically improving the coding and billing functions for medical practices and facilities. The automation not only drives lower costs, but also optimizes revenue for its clients.

  • Presidio is able to quickly integrate its software into a new client’s existing IT systems. The company contracts directly with healthcare companies, in particular providers of out-patient services, and with medical billing vendors.

  • The company has completed a proof of concept with a major healthcare provider representing over 220 locations and 6,000,000 visits per year. This customer’s record volume can more than double Presidio’s sales. Training for this opportunity has commenced and revenues are expected to begin by mid-2021.

Presidio's Role

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Company Information



Incorporated in 2003, Presidio spent its startup years developing core technologies by partnering with private physician practices to build out its proprietary platform, PerformMDTM. This platform was designed to replace manual, paper-based medical record tracking and physician performance management with automated electronic processes.

Founder and President Douglas Evans, MD, is a practicing Emergency Medicine physician, and served as the CFO for his Emergency Medicine physician group in San Francisco until 2019. He has directly experienced the frustrations and daily challenges of working in the antiquated healthcare industry, struggling with error-prone and siloed data to run his 85 physician group practice and pay his providers for their day-to-day work covering 24/7 Emergency Departments in the San Francisco Bay Area.

His goal today remains what it was at the beginning: build the best technology platform for capturing and managing clinical data and documents, enhancing physicians’ clinical quality and productivity while optimizing the reimbursement process for hospitals and providers.

Healthcare Revenue Cycle

The “Healthcare revenue cycle”, simply explained, is the process of how healthcare institutions and doctors are compensated for their services. The revenue cycle begins when a patient visits the hospital and completes the registration process. Once registered, a patient will typically be seen by a nurse and a doctor. Doctors and nurses capture details about a patient’s visit by recording relevant clinical data into an EMR (Electronic Medical Record). These details include but are not limited to the patient’s vital signs, complaints, physician activities, nursing activities, medications given, lab and X-ray test orders, procedures, etc. The granular data taken from each of these visits is critical to all downstream business uses once the patient is discharged. The quality and completeness of physician EMR documentation is the primary driver for optimal future billing and reimbursement.

Competition Matrix

Presidio’s market advantage starts with its 13+ years of industry experience focused on creative revenue cycle solutions for the US outpatient physician services market. The introduction of its NLP-driven data automation platform in a fragmented, mostly manual vendor market, sets Presidio apart from the service companies (not technology) that currently provide billing solutions to this marketplace. Presidio expects that with a significant technology and pricing advantage it will be able to disrupt and displace this market within 3-5 years. By investing early in its foundational PerformMDTM platform and AI-enabled Superchart infrastructure, and by leveraging automated data abstraction processes for multiple uses, Presidio will also be able to penetrate near-adjacent opportunities in the hospital enterprise markets.

Competition Matrix

Competition Matrix Description:

The competitive matrix describes the current marketplace that Presidio is expecting to disrupt. 1) Vertical axis describes the reference companies that provide services ranging from the lower end “general services” to a more comprehensive platform of services beyond the people based legacy coding and billing services that have been the standard for the past 50 years. 2) Horizontal axis defines the level of AI automation technology (low to high) that is applied to the core problem of data extraction and quality management for medical record management. The matrix quadrants can be defined as follows:

  1. Basic general service and low level of AI automation: These companies are strictly service-driven and have no corporate DNA to pivot into a technology solution, other than by purchasing those solutions from a company like Presidio. Today, most outpatient physician groups purchase their solutions from these legacy providers.

  2. Full-service platform and low level of AI automation: There are very few organizations in this marketplace that offer the value-add technical data management solutions together with the basic general services that run on that platform. Provider companies can purchase the excel-based low technology services or the platform service-only solution (example VeriDocs) but not the combined solutions that generally improve operational efficiencies throughout the entire revenue cycle process.

  3. Basic general service and High level of AI automation: There are a handful of smaller point-solution companies (Linguamatics, Ciox, Apixio) that are tackling the AI problem set for single target domain verticals in healthcare. Most are targeting the large Hospital enterprise (Inpatient services) marketplace, while still only focusing on single point solutions for document data extraction or coding only solutions for the revenue cycle process. The larger companies (3M and Optum 360) both offer a full suite of general AI automation solutions, however, neither company offers a solution set that can be effectively consumed by the Emergency Medical coding enterprises in 2020. There are several newer AI company entries (ezDI, Medical Savant) that are targeting market-entry solutions like partial auto-coding without a turn-key coding platform- and these are limited solutions for ER companies. Fathom has been targeting the Radiology auto-coding market with some success but have gained little traction in ER coding due to the significantly higher complexity in this specialty’s coding problem set.

  4. Full-service platform and high level of AI automation: Presidio is the market leader in the Physician market segment that combines the high value of an integrated data management platform with the cost savings and quality enhancing attributes of AI-driven automation solutions. By aggressively lowering the cost of running data management services in target revenue cycle businesses, Presidio expects to bend the price curve to the point where it captures the market from the quadrant 1 legacy providers with a competitive price-point, and/or force the entrenched service companies to purchase AI-enabled service platform in order to remain relevant to the marketplace.


What Presidio Does

Presidio’s platform provides pre-billing solutions for increased revenue capture and cost reduction.

Presidio's Role

1. Healthcare visit data is recorded by the nurse or doctor in an EMR system.

2. Medical Record Capture: Once charts are completed, the EMR data is captured and manually tracked for completeness.

3. Medical Coder Production: Medical coders are persons who are trained and licensed to read the nursing and physician documentation and convert it into standardized codes. The medical coder receives the data in one of two ways: * Manually enters the codes into the hospital or other coding system, or * The EMR medical record information is transmitted electronically into a separate coding system for efficient code capture

4. Quality Check: All medical coder data must be regularly audited for quality and accuracy prior to export into billing (Caduceus, 360 Medical Billing Services, etc.). Coders also should send all inaccurate or incomplete medical records back to the providers for correction and re-coding. Provider documentation performance is tracked and reported to the hospital or physician group for additional quality training.

5. Export: The claim data is exported to the billing system and a claim is then sent to the insurance company. Once the claim is verified the billing system may then send a bill directly to the patient. Doctors and hospitals receive payment for services from the insurance company, government payer or patient.

Efficiency and Revenue Capture

The technology benefits the customer’s cost structure as it decreases the number of employees required to manage data. Presidio also enhances service charge input, thus increasing provider billing.

Medical Record Capture and Reconciliation:
  • Presidio integrates with all enterprise data systems
  • Data Integrity Validation Automation
  • Presidio Cost Efficiency (Direct Full Time Employee “FTE” Savings)
  • Enhanced Charge and Revenue Capture
Medical Coder Production:
  • Automation – Medical coding consumes at least half of the FTE cost of the pre-billing revenue cycle process and is the source of most errors and potential revenue loss. Presidio removes manual work by automating the necessary steps.
Quality Check and Billing Optimization:
  • Quality Auditing and Compliance
  • Coder and Provider Education
  • Reporting and Analysis
Product Suite

PerformMD™ optimizes clinical document management and professional coding and is the cornerstone of the Presidio application suite. It is designed to leverage the latest in clinical AI technology to increase efficiency and human performance while maximizing accuracy and provider reimbursement. Everything is driven by Presidio’s proprietary SuperChart engine which is responsible for normalizing clinical notes into comprehensive, indexed documents of contextually relevant regions which can be further used for insurance coding, medical-legal research, clinical best practices or myriad other healthcare-related activities.

PerformCycle™ provides dashboards and a report panel which easily allows identification of critical areas of revenue leakage and human inefficiencies.

Product Suite

Case Study: US Acute Care

Presidio Health collaborated with US Acute Care Solutions (USACS) to provide a proof of concept for the PerformMD and SuperChart Coding assistance platform. The Presidio Team developed SuperCharts for each of five different USACS locations over a six-week period. For the study, Presidio Health provided two USACS coders with two-hours of training on how to use their platform. Presidio also provided two of their own employees that were experienced with the platform to serve as a productivity reference. USACS coders were compared to their enterprise benchmark coding rate. USACS found that with the assistance of SuperChart, they had a 23% productivity increased compared to their enterprise benchmark. Furthermore, it is estimated that the enterprise benchmark is not indicative of the actual productivity rate for each site. Therefore, it was calculated that the true productivity increase is closer to 56%. Below is a graph depicting the coder productivity data from the USACS Case Study. Data points can be found in the Data Room folder A, document titled “USACS ROI Response & Investment Summary.”

Case Study FTE Savings



Technical Overview

Technology Solutions

Presidio’s solutions are cloud-native applications developed on and running in Amazon Web Services (AWS). Presidio’s latest version, code-named Codigo, utilizes the most modern development patterns that deliver a hybrid FaaS (Functon-as-a-service)/SaaS (Software-as-a-Service) system that is fully reactive, delivering performance and scalability at a public cloud price.

Security in the cloud is another important requirement for any healthcare technology vendor. Presidio has teamed up with two of the leading firms in the area of healthcare cybersecurity. Armor security provides managed security service for Presidio’s current system which removes the active burden of monitoring and remediation of cyber-threat, while making it easier for Presidio to self-certify its systems under HIPAA/HiTech. Once commercially available, Codigo will run under the security umbrella of ClearData which manages all security aspects of the system running in AWS and allows Presidio to declare HiTrust security compliance, which is exceedingly important to larger healthcare institutions.

AI is at the center of Presidio’s technology focus. AI engines have become as ubiquitous as open source Java libraries; the question is not necessarily what AI technology to leverage, but rather how it will be leveraged to deliver value. Additionally, one must look at the entire ecosystem that surrounds the AI module in order to maximize its accuracy.

Data Acquisition from Hospitals is a key component to Presidio’s success. More and more hospital systems are under pressure to share data with outside vendors. While it is marginally getting easier, it still is a pain point for vendors like Presidio given the requirement of data feeds in order to provide the services the company provides. In order to overcome the resistance of hospital IT to work on data sharing projects, Presidio leverages many open-source technologies in order to make integration as close to frictionless as possible. Furthermore, Presidio Health is teaming up with Redox of Madison Wisconsin to lessen the burden of hospital connectivity given their integration industry footprint. The following is an abbreviated list of systems with which Presidio has built and run successful interfaces:

Technology Partnerships

Technology Partnerships are important to Presidio health to make sure that the company can deliver, maintain and monitor it’s platform. The following is a list of some of the technology partners Presidio works with in order to run, secure, monitor and add value to the services we deliver

Tech Partnerships

Technology Stack

Presidio is a Linux-based development shop that relies on Java and many open-source technologies for its development

Tech Stack

Development Team

Presidio’s current development team consists of 5 full-time members and 1 part-time member, including the CTO. The U.S.-based team members are located in various technology centers in the U.S., while the Ukrainian team members are co-located in the European technology center of Kiev. The team is made up of senior java developers, a senior AI and data specialist, a senior product manager, user interface developers, quality assurance and a development operations team.

As Presidio focuses on RCM (Revenue Cycle Management) efficiency improvements through AI and robotic process automation, it is creating a “Centers of Excellence” strategy to address the critical areas of software development required for success in the next 5 years. Given the complexities and uniqueness of the U.S. healthcare market that demand domain expertise, Presidio must maintain a core, U.S.-based team that is well educated in the challenges and nuance of the U.S. healthcare revenue cycle. The company is also aware of the challenges of finding and hiring quality development talent in the U.S. at salaries that are affordable. Over the past 5 years of working in Ukraine, Presidio has found that talented software engineers are available at a 50% savings related to a comparable engineer in the U.S. Because of these factors, Presidio expects its development team to expand more rapidly in Ukraine, but anticipates a modicum of expansion in the U.S.

Presidio expects to expand all Centers of Excellence as follows:

Center of AI and Advanced Data Sciences Presidio is building its team in Kiev around Alex Laptiev. With his Masters in Mathematics training from Kiev, Ukraine’s internationally recognized University (National Taras Shevchenko University of Kiev), he will lead and build out Presidio’s AI and big data product development team. This team is primarily responsible for clinical document feature extraction, document completeness detection, automated coding assistance, automated auditing and audit scoring. Presidio has chosen Kiev as the place to build this team due to Alex’s deep technology network and the availability of University-trained engineers in the region.

Center of Platform Services and Advanced User-Interfaces Presidio’s CTO, Tom Gregory, is a seasoned professional in the area of application platforms, data systems integration and challenges surrounding the scaling of complex data systems and leads the development of Presidio’s software platform that must support the overall revenue cycle and scale to handle millions of patient visits. The core Platform Services team is located in the U.S. given the complexities and required team domain knowledge of the U.S. healthcare system. A key to Presidio’s success thus far has been the design of its purpose-built end-user applications that have been used everywhere in the revenue cycle from patient registration and payment collection to insurance coding and data administration. The Advanced User-Interfaces team is responsible for creating the next generation coding and auditing tools that will take full advantage of the automation being facilitated through AI and process automation. It is expected that this team will grow by adding members in both the U.S. and Ukraine.

Center of Data Analytics and Reporting Ivan Porokh also hails from a top-ranking international technology University in Kiev, Ukraine (National technical University of Ukraine). He is responsible for leading the Data Analytics and Reporting platform (PerformCycleTM) development team for Presidio. This critical product platform continues to expand a unique solution set that provides the business intelligence and insights required by our healthcare customers.


Current Customers

Presidio has $2.5MM of trailing twelve-month revenues (TTM) recurring revenues from 24 master customers. The top master customer represents 45.62% of total revenues.

Note: 360 medical Billing Solutions is made up of 5 individual customers

Current Customers

Sales Pipeline

The chart below outlines, a view of Presidio’s sales pipeline. The company continues to rely on channel partners like Caduceus, AthenaHealth, Azalea and Emergency Care Partners to provide opportunities. Separately, the company continues to push its direct sales effort pipeline.

Sales Pipeline

Marketing Strategy

Marketing Presidio leverages both traditional marketing solutions (conference and meeting attendance), industry newsletter ad placement, and modern lead generation services in order to reach its target market.

  • Healthcare Professional conferences (National and Regional) including the National, regional and state ACEP (American College of Emergency Physicians) conferences, AHIMA (American Health Information Management Association), American College of Radiology and the Radiologic Society of North America (RSNA).
  • Lead Generation includes services that identify and contact healthcare executive prospects and arrange a face-to-face or telephone meeting with the key decision makers.

Social Media Marketing: Across all businesses, only 14% of businesses trust marketing and advertisements, while 90% trust peer recommendations.1 This is especially true in the healthcare marketplace and requires a unique corporate and marketing strategy to identify and communicate with business prospects. Presidio has initiated development of an influencer marketing approach in order to leverage peer-to-peer engagement for all marketing efforts and expects to expand this campaign upon funding completion.

Marketing Study

Identify, prioritize and market to Influencers through targeted content development and social media publishing.

Lead Generation through survey development, email campaigns and influencer networking.

Extending social media network visibility through focused thought leadership with content development leveraging high quality blog messaging, whitepaper and infographic materials.

1. Nielsen Online Customer Survey


Global Overview

The Artificial Intelligence Healthcare market is exploding at a 44.9% CAGR, which is expected to grow from $4.9 billion up to $45 billion by 2026. This growth is mainly a result of needing to reduce rising health care costs. As the data becomes increasingly complex and abundant, companies are employing the use of AI – based technologies such as machine learning and natural language processing (NLP) to synthesize data sets. Another growth factor has been the COVID-19 pandemic, as research labs and pharmaceutical companies world-wide are adopting AI technology in order to expedite the vaccine and drug development processes to fight the spread of the virus.2

AI Healthcare Market

North America Overview

Given that North America is generally more developed and technologically advanced, it is likely to be a paramount contributor to the overall growth during the forecasted period. In addition, the US and Canada spend high amounts on healthcare which result in the demand of increased focus on healthcare services and products.

NLP (Natural Language Processing Market) The majority of NLP use in healthcare today is made up of speech recognition/dictation, data mining and computer assisted coding (CAC). CAC has become a main focus due to the transition from a reclassification of diseases, from ICD -9 to ICD -10.3 All in all, most electronic health records (EHRs) support the use of NLP but in most cases remain underutilized.4 The need and growing demand to synthesize data has overwhelmed Healthcare organizations (HCOs) leaving opportunities for NLP competitors, high tech giants, EHR vendors and many NLP startups. NLP software is still in its nascency but will continue to provide increased ROI for HCOs.

Regulations & Industry Standards The healthcare IT industry is facing significant challenges and opportunities due to changes in regulations/industry standards.

ARRA/HITECH: In 2009, the US federal government enacted the American Recovery & Reinvestment Act (“ARRA”), which included the Health Information Technology for Economic and Clinical Health Act (“HITECH”). HITECH sanctioned the EMR Incentive program, also referred to as the Meaningful Use program (the “Meaningful Use” program), this program provided incentives to physicians and hospitals that can prove they have adopted and are appropriately using technology such as EMR solutions.5

ANSI-5010/ICD-10: In unity with requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the U.S. Department of Health and Human Services (“HHS”) is implementing a new version of the standards for HIPAA-covered electronic transactions, including claims, remittance advices, and requests and responses for eligibility. These standards are called ANSI-5010. HIPAA requires all entities who are covered by HIPAA to upgrade to the tenth revision of the International Statistical Classification of Diseases and Related Health Problems promulgated by the World Health Organization, also known as ICD-10, for use in reporting medical diagnoses and inpatient procedures by no later than October 1, 2014.

Provider Reimbursement: In recent years, there have been significant changes to provider reimbursement by the United States federal government, followed by commercial payers and state governments, which have fostered the move to a value-based system of care. For instance, the Centers for Medicare and Medicaid Services (“CMS”) has enacted several programs oriented around the establishment of Accountable Care Organizations (“ACOs”), which reward providers who demonstrate an emphasis on cost containment and quality improvement, specifically through care coordination and population health efforts. Another similar initiative is the Comprehensive Primary Care Initiative, which is working toward similar goals but with an increased emphasis on the role of the primary care provider. Perhaps more importantly, there is increasing pressure on healthcare organizations to reduce costs and increase quality, replacing fee-for-service with a value-based payment system, which could further encourage adoption of health IT beyond provider populations that are eligible for the Meaningful Use program. As a result, many healthcare organizations will need solutions EMR solutions since significant levels of reimbursements will be based, ultimately, on providing quality outcomes that are captured, communicated, measured, and shared through technology solutions.

PPACA: The Patient Protection and Affordable Care Act (as amended, the “PPACA”), which was signed into law in 2010, contains various provisions that have impacted and will likely continue to impact healthcare IT companies. Some of these provisions may have a positive impact by requiring the expanded use of products to participate in certain federal programs. Other provisions, such as those mandating reductions in reimbursement for certain types of providers, may have a negative impact on existing healthcare IT companies.

The combination of changes in federal and state law, the development of new industry standards, and various incentives that exist today for EMR use, ePrescribing, and pay-for-value initiatives, are moving health care towards an environment where EMRs are as common as practice management systems in all provider offices.

Presidio’s Target Market

Presidio is targeting the $3.4B US Coding services market6 with a Natural Language Processing (NLP) driven data automation opportunity of medical record transformation into billing codes for the US outpatient physician visit market. All of the 1.6 billion (2017) US outpatient visits require this highly manual, high cost and low-quality process today so that providers can get paid for their services.7

Target Market

2. Artificial Intelligence in Healthcare Market. Markets and Markets. Jun 2020.

3. ICD-9-CDM (International Classicfication of Diseases, Ninth Revision, Clinical Modification. TechTarget. 2020.

4. Market Scan Report (Chilmark Research) NLP: Enabling the Potential of Digital Healthcare Era. 2018.

5.ARRA, HITECH Act, Meaningful Use Overview. Excite Health Partners. May 2012.

6. US Medical Coding Market Size. Grand View Research. Published 2019. Found in folder C Market Overview.

7. Target Market Data/Diligence/C. Market Overview

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Financial Information

Fin. Projections Table

Model Assumptions:
  • Within the next year, Presidio has projected it will acquire 5 new managed services sites and 256 new enterprise software sites. Managed services site growth will reach 116 new sites by 2024 and enterprise software site growth will reach 1,059 new sites by 2024.

  • Revenue is based on average/collections per visit, average visits per month and dollars per visit are based on historical averages. Review 3-year Revenue projections tab for additional detail.

  • Costs reflect direct labor for the development/implementation of the Presidio product suite which includes developers, coding/auditing employees, third party costs and hosting costs per site. Expenses reflect existing overhead, sales & marketing expenses, R&D, third party software, and professional services.

  • $3MM of Series B financing occurs in September of 2020 – Royalty Notes remain as notes

  • PPP Loan remains on the balance sheet as a liability (will be forgiven)

  • General: 2020 is a stub period, for this reason, 2020 model outputs are not solely derived from 2020 assumptions and instead are a mixture of actuals/assumptions.

Associated Risks:
  • Sales growth is highly dependent on implementation of new sites.

  • Platform development is required for the Presidio product to maintain its relevance in the marketplace.

  • The company is sunsetting its existing platform and may lose revenues associated with those customers.

  • COVID-19 has impacted the number of individuals visiting hospitals. Presidio is reliant on visit volume to generate revenue. The company is reliant on the execution of key personnel.

The preceding financial projections reflect the Company’s best estimated forecasts and are not guaranteed to be accurate. The timing of performance is estimated post-funding. These figures are forward-looking statements and reflect the Company’s views about various future events or expectations. These figures take into account known and unknown risks, uncertainties and other factors and assumptions which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by this forward-looking financial projection. Please see the note regarding forward-looking statements. A full version of this pro-forma financial model is available through

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Pro-Forma Capitalization

The chart below shows the reorganization of the Presidio Pre Money-Cap tables.

The Original Series A shall convert into Common upon the first close, with the Existing Convertible Notes converting into Series A Shares upon the first close. Existing Royalty Notes have been given the option to convert their outstanding Repayment Amount into the Series B round

Cap Tables

Note: The capitalization tables are subject to change.

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Management Team

Douglas Evans MD, MPH
Founder & President
More Info
Tom Gregory
Chief Technology Officer
More Info
Carlie Richard
Vice President of Client Success
More Info
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Company Disclosures

“On March 21, 2017, Presidio Health and Doug Evans were the subject of a complaint filed in the Superior Court of California, County of San Francisco, by a former CEO of Presidio Health alleging a breach of his employment contract and failure to pay a short term note issued to him during the course of his employment. The case was settled, and the action dismissed with prejudice on April 18, 2018. Copies of the pleadings and other documents are available in the diligence file.”

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Due Diligence Room

From the Carofin Knowledge Base:

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Security Terms

Carolina Financial Securities, LLC (“CFS”) is offering a minimum of $500,000 up to $3,000,000 of Series B Non-Participating Convertible Preferred Stock (the “Offering” or the “Series B Preferred”) by Presidio Health, Inc. (“Presidio” the “Company” or the “Issuer”).

Proceeds from this Offering will be used, as (i) as growth capital by Presidio in order to fund the development and research of its AI platform (ii) sales and marketing expenses; (iii) working capital reserve; (iv) retire debt; and (v) to pay fees and expenses associated with this Offering.

The Offering


Presidio Health, Inc. (“Presidio” the “Company” or the “Issuer”), a Delaware Corporation headquartered in San Francisco, California.

Securities Offered

Series B Non-Participating Convertible Preferred Stock (the “Offering” or the “Series B Preferred”) of the Issuer, offered privately in accordance with S.E.C. Regulation D, Rule 506(c).

Offering Amount

Minimum of $500,000 and up to $3,000,000.

Pre-Money Valuation

The effective pre-money valuation for this offering is $10,000,000. The implied post-money valuation is $13,000,000, with the Series B Preferred Stock ownership representing 23.08% of the Company on a fully diluted basis. Please see the Pro-Forma Capitalization Table enclosed herewith.

Share Price & Number of Shares Offered

Assuming no Royalty notes convert into the Series B, and a total of $3,000,000 is raised, the Company has authorized 1,825,050 Series B Preferred Shares at $1.64 per share for the Offering, representing 23.08% of Presidio’s fully diluted ownership.

Assuming all Royalty notes convert into the Series B, and all Royalty Note holders choose to exchange their Royalty notes for Series B, and a total of $3,000,000 is raised by the Series B, the company has authorized, 2,437,2020 Series B Preferred Shares, representing 28.60% of Presidio’s fully diluted ownership

Investor Qualification

All Investors in the Series B Preferred (the “Series B Investors”) must qualify as an “Accredited Investor” as defined within Regulation D, Rule 501as promulgated by the U.S. Securities Exchange Commission.

Investment Objectives

To generate capital gains for investors.

Minimum Subscription Amount

The minimum subscription amount for an investor to directly invest in the Offering will be $10,000, subject to exception by the Company.

Offering Period

The Offering will expire on February 28th, 2021 subject to an optional extension by the Company at its sole discretion.

Terms of the Security


The Series B Preferred will carry an annual 6.0% cumulative dividend which shall accrue until paid in connection with a liquidation event as defined below.

Liquidation Preference

In the event of any liquidation, dissolution or winding up of the Company, the holders of the Series B Preferred shall first be paid as follows:

First, to pay one times the original purchase price plus accrued dividends plus declared and unpaid dividends on each of the Series B Preferred (or, if greater, the amount that the holders of the Series B Preferred would receive on an as-converted basis). Second, to pay one times the original purchase price plus accrued dividends plus declared and unpaid dividends on each of the Series A Preferred (or, if greater, the amount that the holders of the Series A Preferred would receive on an as-converted basis). The balance of any proceeds shall be distributed pro rata to holders of Common Stock.

A merger or consolidation (other than one in which stockholders of the Company own a majority by voting power of the outstanding stock of the surviving or acquiring corporation) and a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company will be treated as a liquidation event (a “Deemed Liquidation Event”), thereby triggering payment of the liquidation preferences described above unless the holders of a majority of the Series B Preferred to convert into Common Stock as defined below under Optional Conversion. The Investors' entitlement to their liquidation preference shall not be abrogated or diminished in the event part of the consideration is subject to escrow in connection with a Deemed Liquidation Event.

Optional Conversion

The Series B Preferred initially convert at a 1:1 ratio to Common Stock at any time at option of holder, subject to adjustments for stock dividends, splits, combinations and similar events and as described below under “Anti-dilution Provisions.”

Mandatory Conversion

Each share of Series B Preferred will automatically be converted into Common Stock at the then applicable conversion rate (i) in the event of the closing of an underwritten public offering with a price of 3 times the original purchase price (subject to adjustments for stock dividends, splits, combinations and similar events) and net/gross proceeds to the Company of not less than $25,000,000 (a “Qualified Public Offering”), or (ii) upon the written consent of the holders of 66 2/3% of the Series B Preferred.

Anti-Dilution Provision

Broad based weighted average anti-dilution protection against additional equity being issued or options granted at a value lower than that implied at the time of the Series B Preferred closing. Options or Warrants approved by the Board of Directors for issuance to management, consultants and/or key employees shall not trigger anti-dilution adjustment. This anti-dilution protection does not apply to anticipated subsequent rounds of financing needed to grow the Company that are sold at a higher valuation than that implied at the time of the Series B Preferred closing.

Investor Rights

Voting Rights

Shareholders owning Series B Preferred shares will have pro-rata voting rights with the common shareholders on an “as if converted” basis.

Approval Rights/Negative Covenants

So long as Series B Preferred shares are outstanding, the Company will obtain the consent of a majority of the Series B Preferred for any merger or sale of all or part of the Company at a price resulting in a return to the Series B Preferred shareholders (inclusive of all prior distributions received by the Series B Preferred shareholders) of less than two times their Investment Principal.

Board of Directors

The Board of Directors shall initially consist of five members (the “Directors”) as follows: (i) holders of the Series B Preferred shall be entitled to designate one voting Director (the “Series B Director”); (ii) holders of the Series A Preferred shall be entitled to designate one voting Director; (iii) holders of the Common shall be entitled to designate one voting Director; (iv) the Company’s Chief Executive officer shall be a voting Director; and (v) the remining voting Director shall not otherwise be associated with the Company and shall be elected by all of the outstanding preferred and common stock, voting together as a single voting group. The Board will elect an Audit Committee and a Compensation Committee, each of which will have three members consisting of outside Board members. The Series B Director will have the right, but not the obligation to sit on either or both of these committees. The Company shall pay for or reimburse reasonable out-of-pocket expenses for all Directors.

Information Rights

The Company will provide financial reporting, including quarterly, year-to-date and annual income, balance sheet and cash flow statements as compared to the current budget and compared to results for the comparable period for the prior year to Major Investors (as further defined herein) and the Administrative Agent. An annual review will be performed within 120 days of year-end by the Company’s outside auditor selected by the Audit Committee. The coming year’s annual budget will be provided to each Investor within 30 days of each fiscal year-end for as long as they continue to own at least that number of Series B Preferred shares such Investor originally purchased. Financial statements will be provided to the Series B Preferred shareholders for as long as they continue to own at least that number of Series B Preferred shares such Investor originally purchased and/or once the Series B Preferred have converted to common shares.

Inspection Rights

So long the Series B Preferred is outstanding and Investors representing 66.6% of the Series B Preferred have voted affirmatively to request that their representatives conduct an inspection of the Issuer, Investors shall be entitled to standard inspection rights upon reasonable notice.

Preemptive Rights

All Series B Preferred shareholders holding at least $100,000 of Series B Preferred Stock (based upon each such Investor’s pro rata ownership of total shares of all classes on an “as if converted basis”, and each referred to herein as a “Major Investor”) shall have preemptive rights to purchase additional shares in bona fide offerings for capital raising purposes until such time as the Series B Preferred shares convert to common shares, and/or sale or merger of the Company occurs, subject to customary exclusions, including without limitation: (i) issuances of management/employee/director/consultant incentive equity, (ii) equity issued at any time pursuant to any currently outstanding debt instruments, options or warrant agreements (ii) equity securities issuable upon exercise of any options or other equity security equivalents, (iv) equity securities issued in connection with bona fide third party financing transactions and (v) equity securities issued in connection with acquisitions and other strategic transactions.

Co-Sale/Tag-ALong Rights

Should any single Series B Preferred shareholder or shareholder of any class owning five percent (5%) or more of the Company’s total equity make a private sale of its shares (to someone other than another employee, officer or Director or then current shareholder of the Company, or a transfer pursuant to estate planning), then the holders of Series B Preferred shares would be entitled to participate, pro rata, in the sale (i.e., a Tag-Along Right).

Drag-Along Rights

If a Series B Preferred shareholder, Series A Preferred shareholder, or a common shareholder, or a group of shareholders owning more than sixty six and two thirds percent (66 2/3%) of the total shares of all classes (“Selling Shareholders”) decide to (i) sell their shares to an unrelated third party, (ii) sell or license all or substantially all of the Company’s assets to an unrelated third party or (iii) consummate a similar “sale of the company” transaction, and such transaction is unanimously approved by the Company’s Board, then they shall have the right (i.e., a Drag-Along Right) to require the remaining shareholders of all classes to sell their shares at the same price and on the same terms as offered by the third party for the Selling Shareholders’ shares; subject to standard exceptions and requirements.

Sale of Preferred Shares

The Series B Preferred are subject to resale restrictions under applicable securities laws and are not registered for sale with the Securities and Exchange Commission.

Registration Rights

Investors in the Series B Preferred, together as one class, will be granted the following registration rights after the Company’s IPO: (i) one demand registration for underwritten offerings, (ii) unlimited piggyback rights (including participation in the Company’s IPO, subject to underwriter approval) and (iii) rights to register shares in unlimited S-3 "shelf" offerings provided that the aggregate amount of the proceeds of any such S-3 offering is at least $5,000,000. All of the related expenses (except underwriters' discounts and commissions) incurred by the holders shall be paid by the Company. The registration rights shall be subject to standard black out rights.

Other Matters

Escrow Account

The Company will establish an escrow account at an FDIC-insured banking institution (the “Custodian”). Under escrow instructions with the Custodian, all subscription amounts will be deposited into the escrow account until Presidio has received, and is prepared to accept, subscriptions for the entire minimum amount of $500,000 of the Series B Preferred offered hereby, and/or a combination of such subscriptions and other alternative methods of financing, such as short-term bridge notes (each an “Alternative Financing”). When this subscription amount, which may include Alternative Financing, has been reached, the amounts previously deposited in escrow will be released to the Company (the “Initial Closing”). Amounts received following this distribution will fund the Issuer directly. If the Company does not receive subscriptions, which may include Alternative Financing, equal to at least $500,000 prior to November 15, 2020, then at the termination date all funds on deposit in the escrow account will be returned to the corresponding subscribers, without interest.

Representation and Warranties

Standard representations and warranties as to due organization, existence in good standing and power to conduct its business will be provided by the Company in the purchase agreement. Standard representations and warranties typical of a private offering of equity units will be provided by each Investor, including as to status as an “accredited investor”, receipt of Private Placement Memorandum, Company’s shareholder agreement, and other offering documents and other materials as requested, and acknowledgement that the Offering is being made under exemption from registration requirements (Details to be found in the purchase agreement). In order to comply with the requirements of Rule 506(c), Each Investor shall be obligated to provide the Company with either: (i) third party confirmation of such Investor’s status as an “accredited investor”, or (ii) such information as reasonably requested by the Company to confirm such Investor’s status as an “accredited investor”.

Conditions to Closing

The closing of the Offering (when funds are released from the Escrow Account and are transferred to the Issuer) is subject to customary pre-conditions, including but not limited to:

  • Receipt of all required authorizations, approvals and consents.

  • Conversion of the Original Series A Preferred, Convertible Notes, and Royalty Notes, if applicable;

  • Delivery of customary closing certificates: and

  • The absence of material adverse changes with respect to the Company.

Key Man Insurance

Within 90 days of the release of invested funds from the escrow account, the Company shall purchase and maintain a $1MM Key Man insurance policy on Thomas Gregory, the Company’s Chief Technology Officer.

Fees and Expenses

Carolina Financial Securities, LLC shall receive both a 7.0% fee for all equity capital raised as well as common equity warrants of the Issuer as compensation for services rendered. The amount of these CFS warrants will equal a number of shares equal to 7.0% of the Series B Preferred shares purchased by Investors, for a purchase price of $100 and with an exercise price equal to 1/3 of the price per share of the Series B Preferred shares. CFS may share up to 50% of its fees and warrants with Carofin, LLC, an affiliated Broker-Dealer, for its assistance in the placement of the Offering. All legal fees and out of pocket expenses relating to closing the Offering will be paid by Presidio with CFS expenses subject to the Engagement Agreement between Presidio and CFS.

Administrative Agent

CFG Financial Services, LLC (“CFG FS”), an affiliate of Carofin and Carolina Financial Securities will act as administrative agent for the Series B Preferred shareholders, often coordinating reporting and other obligations between the Company and the Series B Preferred shareholders. The Company will reimburse CFG FS for its reasonable out of pocket expenses.

Governing Law


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Security Visualization

Presidio Non-Participating Convertible Interest


Liquidation Preference Illustration

Liquidation Preference

Royalty Note Participation

The existing Royalty note holders, have been offered an opportunity to participate in the Series B. They have also been offered the opportunity to exchange their existing notes for Series B. The chart below, shows the options granted to the Royalty Note holders given participation in the Series B.

Royalty Part

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Frequently Asked Questions

What is Carofin?

Carofin is a FINRA broker dealer, an investment bank headquartered in Brevard, North Carolina, that specializes in financing smaller businesses. Carofin’s parent company Carolina Financial Group, LLC, was established in 1995 and its affiliates have privately placed over $1 billion of debt and equity securities.

Is this security registered with the Securities Exchange Commission (S.E.C.)?

No. It is being privately placed under Rule 506c of Regulation D of the S.E.C.

Must Investors in the Presidio Shares be Accredited Investors?

Yes. They must have household income of $300,000 (for married couples) OR a net worth of $1,000,000, excluding the value of their primary residence, OR qualify for an institutional category of investor.

How will Investors be repaid?

Investors are entitled to either (1) the original purchase price plus accrued dividends plus declared and unpaid dividends on each of the Series B Preferred OR (2) if greater, the amount that the holders of the Series B Preferred would receive on an as-converted basis.

What rights do I have as an Investor??

Information Rights

So long as an Investor holds a Preferred Share in the Issuer, the Investor will receive standard financial reporting, including monthly, year-to-date, and annual income, balance sheet, and cash flow statements as compared to the current budget and compared to results for the comparable period for the prior year, and annual audited financial statements and his/her/its Schedule K-1 to the Issuer’s tax return.

Approval Rights/ Negative Covenants

So long as Series B Preferred shares are outstanding, the Company will obtain the consent of a majority of the Series B Preferred for any merger or sale of all or part of the Company at a price resulting in a return to the Series B Preferred shareholders (inclusive of all prior distributions received by the Series B Preferred shareholders) of less than two times their Investment Principal.

Note: Other rights included in the term sheet.

Will Investors Continue to Receive Information About the Security After Issuance?

Given its role as the administrative agent, CFG Financial Services is able to keep Investors informed about any unexpected changes in the Issuer's business and general operational updates.

What if I have questions in the future about the Business’s performance?

Carofin will distribute updates to investors at least quarterly, including account statements. You should feel free to also email Carofin at [email protected] or telephone us at 828.393.0088.

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Risk Factors






A. Investment Related Risks

Speculative Investment

The Series B Preferred being offered should be considered a speculative investment. The ability of the Company to achieve its objectives may be determined by factors beyond its control that cannot be predicted at this time. Consequently, there can be no assurance that the Company’s efforts to continue its business operations will prove to be sufficient to enable the Company to generate the funds required to make distributions. Anyone investing in the Series B Preferred should do so only if they are financially able to sustain the loss of their entire investment and should recognize that such a possibility exists.

No Secondary Market for the Securities

As the issuance and sale of the Series B Preferred is a private transaction, there is currently no public market for the Issuer’s securities being offered herein. The Series B Preferred are not a publicly registered security and will have no secondary sale liquidity.

Existing Debt/Capital Structure Reorganization

Given all Royalty Notes ($575,000) exchange into Series B and convertible notes convert into Series A, the Company will have existing debt of $100,000 governed by a Loan and Security Agreement. Should the Company default on any of the payments owed to the senior secured lenders, they may take actions which could affect the Company’s ability to make distributions.

Conversion of Outstanding Securities

The Company and holders of other securities, such as Convertible Notes and the Original Series A Preferred shares are yet to formalize the conversion of such instruments into the new securities contemplated in this Offering. Any delays in this process may delay the first closing of the Offering.

B. Industry Related Risks


The software industry in which Presidio participates is intensely competitive, and if Presidio does not compete effectively, operating results could be harmed. Large, well-established, enterprise application software vendors may choose to enter Presidio’s market and compete with them. In the future, a competitor offering bundled software packages could include a free service similar to Presidio’s as part of its standard offerings or may offer a free standalone version of a service similar to theirs.


Many healthcare industry participants are consolidating to create integrated healthcare delivery systems with greater market power. As provider networks and managed care organizations consolidate, thus decreasing the number of market participants, competition to provide products and services like the Company’s will become more intense, and the importance of establishing relationships with key industry participants will become greater. These industry participants may try to use their market power to negotiate price reductions for the Company’s products and services.

Cyber Security

The company’s services involve the storage and transmission of customers’ proprietary information and protected health, financial, payment and other personal information of patients. The company relies on proprietary and commercially available systems, software, tools and monitoring, as well as other processes, to provide security for processing, transmission and storage of such information. Due to the sensitivity of this information, the effectiveness of such security efforts is very important. If the company’s security measures are breached or fail as a result of third-party action, employee error, malfeasance or otherwise, someone may be able to obtain unauthorized access to customer or patient data.

Product Performance

The Company competes with others in the industry. Competitors include companies that may have greater financial and other resources than the Company. Additionally, these competitors could use strategies to prevent the Company from achieving its objectives and may gain market share. This may have a material adverse impact on the financial position of the Company.

Sales Capacity

Failure to effectively develop sales capabilities could harm the Company’s ability to increase their customer base. Increasing their customer base and sales will depend, to a significant extent, on their ability to develop their sales and marketing operations and activities. The Company will be substantially dependent on their direct sales force and partners to obtain new customers. Presidio believes that there is significant competition for experienced sales professionals with the sales skills and technical knowledge that they require. Their ability to achieve significant revenue growth in the future will depend, in part, on their success in recruiting, training and retaining a sufficient number of experienced sales professionals.

C. Performance Related Risks

Possibility of Material Differences between Actual and Projected Results

The financial projections contained in this Summary Offering Material and any supplements thereto were prepared by management of the Company and represent the Company’s estimated results of operations. These financial projections are based upon a number of estimates and assumptions regarding future events. Some or all of the assumptions upon which the Company is basing its projections may prove to be inaccurate. The Company’s financial projections are dependent on the successful implementation of management’s operating strategies and are based on assumptions and events over which the Company only has partial or no control. The assumptions underlying such projected information require the exercise of judgment, and the projections are subject to uncertainty due to, among other factors, the effects that economic, business, competitive, legislative, political or other changes, as well as the risk factors identified in this Summary Offering Material might have on future events. Changes in the facts or circumstances underlying such assumptions could materially affect the projections. Accordingly, there can be no assurances that the Company will operate in accordance with such projections. Actual results for any period may be substantially less attractive for the Company than the projections indicate.

Need for Additional Capital

No assurance can be given that the Company will be able to conduct its operations without incurring costs in excess of those estimated. If the revenues generated from the Company’s operations are insufficient to satisfy the Company’s operating costs, the Company may seek to sell additional equity or secure debt financing. The sale of additional equity may result in dilution to the Company’s shareholders, and debt financing, if available, may include restrictive covenants that could restrict the Company’s operations and finances. There can be no assurance that additional capital will be available in amounts or on terms acceptable to the Company, if at all. The inability to raise funds on acceptable terms would negatively affect the Company’s business, operating results and financial condition, and may cause the Company to become insolvent or discontinue operations.

Negative Changes in Economic Conditions

Any negative changes in economic conditions, significant price decreases especially in management fees, deflation or adverse events related to real estate industry could harm and have a material adverse effect on the Company’s business.

Product Performance

Interruptions or performance problems associated with the Company’s software solutions, platform and technology may adversely affect their business and operating results. Presidio may in the future experience disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of users accessing their platform simultaneously, denial of service attacks, or other security related incidents. In some instances, Presidio may not be able to identify the cause or causes of these performance problems within an acceptable period of time. If their platform is unavailable or if the company’s users are unable to access it within a reasonable amount of time or at all, their business could be harmed.

Sales Capability

Failure to effectively develop sales capabilities could harm the Company’s ability to increase their customer base. Increasing their customer base and sales will depend, to a significant extent, on their ability to develop their sales and marketing operations and activities. The Company will be substantially dependent on their direct sales force and partners to obtain new customers. Presidio believes that there is significant competition for experienced sales professionals with the sales skills and technical knowledge that they require. Their ability to achieve significant revenue growth in the future will depend, in part, on their success in recruiting, training and retaining a sufficient number of experienced sales professionals.

D. Personnel Risks

Management of the Company

The Investors will have limited ability to participate in any manner in the management of the Company or its day-to-day decisions.

Reliance on Key Personnel

The Company’s success is, to a large degree, dependent upon the expertise, experience and contacts of Doug Evans, Tom Gregory, and other management of the Company. The Company could be adversely affected if any of these managers cease to be active in the Company’s management. The success of the Company also depends on its ability to retain and continue to attract qualified personnel. There can be no assurance that the Company will be able to attract and retain qualified employees on acceptable terms. If the Company experiences significant growth, it may become increasingly difficult to hire, train and assimilate the new employees necessary to support such growth. The Company’s inability to retain and attract key employees could adversely affect its business, operating results, relationships with customers and financial condition.

E. Regulatory, Governmental & Legal Risks

Availability of Information

The Company is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Therefore, members may not have access to information that they would have if the investment were made in a publicly held company whose offering was issued under the Exchange Act, and the reporting regulations provided by the Exchange Act. In addition, while the Company may commit to provide periodic reporting post-closure updating financial and operating performance or developments specific to material events, there can be no assurance that this information will be delivered in a timely manner.

Change in Regulatory or Legal Environment

To the extent there is a change in the legal or regulatory framework in the location where the Company operates as well as the health and agricultural authorities, there is the possibility that the Company’s business or financial conditions could be negatively impacted.

Future Federal Income Tax Legislation and Regulations

No assurance can be given that the current Congress or any future Congress will not enact federal income tax legislation that could adversely affect the tax consequences of participating in the Offering.

Lack of Rulings and Opinions; Possibility of IRS Challenge of Borrower Tax Positions

The Borrower has not requested and will not request any tax ruling from the IRS regarding the tax consequences of the Borrower’s activities. Accordingly, there is no certainty as to the tax consequences of participating in the Securities. The Borrower has not sought or obtained a legal opinion with respect to the tax treatment of the offering proceeds or issuance of the Securities. Accordingly, Lenders are urged to consult your own tax advisor with respect to the federal and state tax consequences arising from participation in this Offering.

Legal Proceedings

Although the Company currently is not a defendant in any material legal proceedings, any of the Company’s operations, activities, employees or agents could subject the Company to legal claims and proceedings. Any such claims or proceedings, whether with or without merit, could result in costly litigation, fines, judgments or settlements and could require the Company to modify or cease operation of the Company’s facilities, any of which could have a material adverse effect on the Company’s business, results of operations and financial condition.

F. Other Risks

Reliance on Certain Aspects of the Offering

Potential investors should not rely exclusively on one aspect of the security structure when making an investment decision on whether or not to participate in this Offering.

Unforeseen Risks

In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. Prospective investors reviewing this Offering Summary should keep in mind other possible risks that could be important to the success of their investment in the Securities.

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Best Interest & Other Disclosures

These securities have not been registered with the Securities and Exchange Commission (the “SEC” or the “Commission”), or with any state securities commission or any other regulatory authority. The securities are being offered in reliance upon an exemption from the registration requirement of federal and state securities laws and cannot be resold unless the securities are subsequently registered under such laws or unless an exemption from registration is available. Neither the SEC nor any other agency has passed on, recommended or endorsed the merits of this offering (this “Offering”) or the accuracy or adequacy of these confidential offering documents (the “Offering Package”). Any representation to the contrary is unlawful.

These securities are offered through Carofin, LLC, Member of FINRA/SIPC. Carolina Financial Securities is an affiliate of Carofin and both Broker-Dealers are affiliates of Carolina Financial Group, LLC You may learn more about the services we offer and the details surrounding such services through our Customer Relationship Summary. Documents have been prepared by Carolina Financial Securities and have been reviewed and approved by the management of the Company. The information contained herein has not been independently verified and is dependent on information provided by the Company to Carolina Financial Securities, LLC.

Our firms seek to present vital capital with meaningful investment opportunities through the fundamental analysis of the businesses we seek to finance. Such analysis is usually conducted through a First Principles approach.

When we provide you with a recommendation, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the recommendations, we provide you. Here are some examples to help you understand what this means:

Proprietary Products: Our firms will often present investments that are only available though them, which may result in a higher placement fee.

Conflicting Positions as Administrative Agent: CFG Financial Services, an affiliate of Carofin and Carolina Financial Securities will act as administrative agent for both the Royalty Notes and the Series B Preferred. Unless all Royalty Notes are converted into Series B Preferred, CFG Financial Services may be presented with conflicts of interest.

Our firms offer brokerage services to accredited investors, exclusively through the sale of private placements. the offerings we bring to market are carefully selected, and any recommendation you may receive from us will be limited to these offerings. Therefore, we may be unable to adequately compare the risks and benefits of the offerings we bring to offerings presented by other financial professionals. While our firms will often present new investments and discuss such investment’s risks and benefits with you, the ultimate authority to make such investment rests solely with you.

Our firms do not hold any investor cash or securities, and securities offered by us often have no easily assessable market value, so our firms will not monitor the market value of your investment on an ongoing basis. The investments we present often require a minimum investment of $5,000 for equity offerings and $10,000 for debt offerings.

Fees and costs may reduce any amount of money you make on your investments over time. Our firms are mostly compensated through placement fees, which are payable by the issuer, meaning that the firms will be compensated by receiving a percentage of the funds raised in an offering, regardless of the investment performing as expected. Such placement fee is usually between 3% and 7% (please find the specific Placement Fee for this offering in the “Placement Agent Fees” section of the “Security Terms”. Given that different investments have different placement fees, we may often have a conflict of interest when presenting these investments to you.

The information contained herein is for informational purposes only and is not intended for further distribution. The information does not constitute a complete description of any investment or investment performance. This document is in no way a solicitation nor is it an offer to sell securities nor is it advice or recommendation regarding any investment. The information is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. No security listed in this document or otherwise offered through Carolina Financial Securities, LLC or Carofin, LLC may be purchased without prior receipt of a complete Private Placement Memorandum or other official offer to sell.

Due diligence materials related to this Issuer and the Offering are available to you through Carofin. If you have not received your login information to access, please contact your company representative to have access granted.

The Company will not offer, sell or issue any Securities in any jurisdiction where it is unlawful to do so or where laws, rules, regulations or orders would require the Company, in its sole discretion, to incur costs, obligations or time delays disproportionate to the net proceeds the Company will realize from such offers, sales or issuances. Neither this Offering Package nor any subscription agreement shall constitute an offer to sell or a solicitation of an offer to purchase any Securities in any jurisdiction in which such transactions would be unlawful.

Private placements are high risk and illiquid investments. As with other investments, you can lose some or all of your investment. Nothing in this document should be interpreted to state or imply that past results indicate future performance, nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided in this document. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be imped if it is sold. Please see the Private Placement Memorandum (PPM), and the complete list of contents of this Offering Package for a more detailed explanation of the securities Summary of Terms, Investor Suitability Standards, Confidentiality, Securities Matters and Risk Factors.

Caution Regarding Forward-Looking Statements

Certain statements in this Summary Offering Material may be “Forward-looking” in that they do not discuss historical facts but instead note future expectations, projections, intentions, or other items relating to the future. We caution you to be aware of the speculative nature of forward-looking statements as these statements are not guarantees of performance or results.

Forward-looking statements, which are generally prefaced by the words “may,” “anticipate,” “estimate,” “could,” “should,” “would,” “expect,” “believe,” “will,” “plan,” “project,” “intend,” and similar terms, are subject to known and unknown risks, uncertainties and other facts that may cause our actual results or performance to differ materially from those contemplated by the forward-looking statements.

Although these forward-looking statements reflect our good faith belief based on current expectations, estimates and projections about, among other things, the industry and the markets in which we operate, they are not guarantees of future performance. Whether actual results will conform to our expectations and predictions is subject to several known and unknown risks and uncertainties, including risks and uncertainties discussed in this Summary Offering Material.

Consequently, all the forward-looking statements made in this Summary Offering Material are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Risks, uncertainties, and factors that could cause actual results to differ materially from those projected are discussed in the “Risk Factors” section of this Summary Offering Material. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Considering these risks, uncertainties, and assumptions, the forward-looking events discussed in the Summary Offering Material might not occur.

State Securities Laws

The Company will not offer, sell or issue any securities in any jurisdiction where it is unlawful to do so or where laws, rules, regulations or orders would require the Company, in its sole discretion, to incur costs, obligations or time delays disproportionate to the net proceeds the Company will realize from such offers, sales or issuances. Neither this Offering Package nor any subscription agreement shall constitute an offer to sell or a solicitation of an offer to purchase any securities in any jurisdiction in which such transactions would be unlawful.