Ethiopia, Pharmaceuticals, Ebola, Cholera, Hatti, Hurricanes, Selling a Non-Profit:

I joined Heart to Heart Int’l in 2014 after 30+ years in the pharmaceutical industry. I’d spent over two years as a teenager living in Ethiopia (my parents were missionaries.) Part of that time we lived deep in the bush, far from any type of medical support. I was drawn by the mission of HHI, including supplying medicines and medical support to areas in need, like places I had lived. I also felt my background in pharmaceuticals was a great fit.

 

After a few years leading HHI, including some fairly intense responses (e.g. Ebola in Liberia, Cholera in Haiti, hurricanes in Texas and Puerto Rico) I realized that we were not doing as much for people in our own country as I would have wished. Hence the idea to start a nonprofit Patient Assistance Program, bringing high cost medicines to elderly and low income patients in the U.S. by contracting with pharmaceutical companies who would donate the medicines.

 

The HHI board approved the idea in Dec 2018, and in 2019, I began shifting HHI leadership to our COO, who became the CEO. Meanwhile I started RegaloRx, a nonprofit PAP, which launched late that year. It was designed to compete with for profit PAP’s, earn a profit and turn those profits over to HHI.

 

In retrospect, launching a new business right before the pandemic began was the worst possible timing imaginable. We quickly pivoted to a virtual operation and remained that way even after the pandemic subsided. We also had to borrow money to fund the startup expenses, so the profits we started to earn were all going to debt repayment and servicing. It was going to be several years before we paid off the debt and could start funding HHI. By that time we were helping 40,000+ patients across the U.S., providing them free medicines and shipping them from our contracted mail order pharmacy.

 

In 2022, we were approached by a for profit company to buy our operation. In 2023, with the agreement of the RegaloRx Board, we decided to seek other potential acquirers since the value of the company needed to be verified. An obvious question is “how can you sell a nonprofit”? It can be done by selling the assets inside the entity but of course not the 501c3 itself. (I will describe this in the presentation.)

 

In late 2023, we sold all the assets of our nonprofit operation to a for profit company for $7MM, repaid all our debts and obligations, had approximately $900,000 left over (which belongs to HHI) and the pledge by the new  owner to support HHI for up to 7 more years based on certain milestones. No employee lost their job as a result of the acquisition. I remained another year (as a requirement of the deal) to run the new Regalo. I retired from the company at the end of September 2024.