UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): September 4, 2020

 

NovAccess Global Inc.

(Exact name of registrant as specified in its charter)

         

Colorado

 

000-29621

 

84-1384159

(State or other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

         

8834 Mayfield Road, Suite C, Chesterland, Ohio 44026

(Address of principal executive Offices) (Zip Code)

         
         

Registrant’s telephone number, including area code: 440-644-1027

         

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

      ☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

      ☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

      ☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

      ☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each Class

Trading Symbol

Name of each exchange on which registered

None

Not Applicable

Not Applicable

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).  

Emerging Growth Company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On September 4, 2020, we entered into a management services agreement (the “Agreement”) with TN3, LLC. Pursuant to the Agreement, TN3 will provide us with office space in Chesterland, Ohio and management, administrative, marketing, bookkeeping and IT services for a fee of $30,000 a month. The initial term of the Agreement is three years, with subsequent one-year renewals.

 

TN3 holds all of our outstanding preferred stock and is owned by Daniel G. Martin, our chief executive officer and the sole member of our board of directors.

 

The description of the Agreement is qualified in its entirety by the Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

On June 2, 2020, we entered into a membership interest purchase agreement with Innovest Global, Inc. (“Innovest”) to acquire StemVax, LLC for 7.5 million shares of unregistered common stock. StemVax is a biotechnology company developing novel therapies for brain tumor patients and holds a related exclusive patent license from Cedars-Sinai Medical Center in Los Angeles, California known as StemVax Glioblast (SVX-GB). On September 8, 2020, we completed the transaction, issuing the shares to Innovest and acquired StemVax, which is now our wholly-owned subsidiary. The acquisition of StemVax is the first step in our transition into a new business plan focused on commercializing developmental healthcare solutions in the biotechnology, medical, and health and wellness markets. Daniel G. Martin, our chief executive officer and the sole member of our board of directors, is the chairman of the board and a significant shareholder of Innovest.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

On September 4, 2020, we issued 25,0000 shares of unregistered Series B Convertible Preferred Stock, $0.01 par value per share (the “Series B Preferred”), to TN3, LLC in exchange for the redemption of 5,000 shares of Series A Preferred Stock, $0.01 par value per share (the “Series A Preferred”), held by TN3. The Series B Preferred shares were issued in an exempt transaction under Section 4(a)(2) of the Securities Act of 1933. TN3 is owned by Daniel G. Martin, our chief executive officer and the sole member of our board of directors.

 

On September 8, 2020, we issued 7.5 million shares of unregistered common stock to Innovest for the acquisition of StemVax. The shares were issued in an exempt transaction under Section 4(a)(2) of the Securities Act of 1933. Daniel Martin is the chairman of the board and a significant shareholder of Innovest.

 

Item 3.03 Material Modification to Rights of Security Holders.

 

On September 4, 2020, we issued 25,0000 shares of Series B Preferred to TN3, LLC in exchange for the redemption of 5,000 shares of Series A Preferred held by TN3. The holder of our Series A Preferred is entitled to cast a number of votes equal to that number of common shares which is not less than 60% of the vote required to approve any action presented to the shareholders. Each share of Series B Preferred entitles the holder to cast 40,000 votes on any action presented to the shareholders. Item 5.03 of this Current Report on Form 8-K provides additional information about the terms of the Series B Preferred.

 

As the sole holder previously of the Series A and currently the Series B Preferred, TN3 has the ability to cast the votes necessary to approve any matter presented to the company’s shareholders. However, the Series B Preferred shares are convertible into common stock and participate in dividends and distributions on an as-converted basis, unlike the Series A Preferred shares. As a result, the issuance of the Series B Preferred shares in exchange for the redemption of the Series A may be considered to impact the rights of our common shareholders.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On September 4, 2020, we filed a certificate of designation with the Colorado Secretary of State to authorize 25,0000 shares of Series B Convertible Preferred Stock, $0.01 par value per share. Each share of Series B Preferred is convertible at the option of the holder into 10,000 shares of our common stock. The holder of the Series B Preferred is entitled to vote with the common shareholders on all matters presented to the shareholders and each share of Series B Preferred entitles the holder to cast 40,000 votes. The conversion and voting ratios are subject to adjustment for stock splits, combinations and similar corporate actions. Each share of Series B Preferred participates in dividends and upon liquidation of the company with the common stock on an as-converted basis.

 

The description of the certificate of designation is qualified in its entirety by the certificate filed as Exhibit 3.1 to this Current Report on Form 8-K.

 

 
 

 

Item 9.01 Financial Statements and Exhibits.

 

(a)     Financial statements of businesses acquired.

 

We are required to file financial statements of StemVax pursuant to Rule 8-04(b) of Regulation S-X by November 24, 2020 and will file them by amendment to this Current Report on Form 8-K by that date.

 

(d)     Exhibits.

 

3.1 Certificate of Designation of Series B Convertible Preferred Stock dated September 4, 2020

10.1

Management Services Agreement between NovAccess Global Inc. and TN3, LLC dated September 4, 2020

99.1 Press Release dated September 9, 2020 Captioned “NovAccess Global Acquires StemVax Therapeutics from Innovest Global”

 

 

 
 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

NovAccess Global Inc.

 

 

Date: September 11, 2020

/s/ Daniel G. Martin

 

By Daniel G. Martin, Chief Executive Officer

 

 

 

 

 

Exhibit 3.1

 

Certificate of Designation of

Series B Convertible Preferred Stock of NovAccess Global Inc.

 

Pursuant to Section 7-106-102 of the Colorado Revised Statutes, NovAccess Global Inc., a Colorado corporation organized (the “Corporation”), does hereby submit the following:

 

Whereas, the Articles of Incorporation of the Corporation (the “Articles of Incorporation”) authorizes the issuance of up to 50,000,000 shares of preferred stock, par value $0.01 per share, of the Corporation (“Preferred Stock”) in one or more series, and expressly authorizes the Board of Directors of the Corporation (the “Board”), subject to limitations prescribed by law, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the Board may fix and determine the relative rights and preferences of the shares of any series so established; and

 

Whereas, it is the desire of the Board to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights, preferences and limitations of the shares of such new series. 

 

Now, therefore, be it resolved, that the Board does hereby provide for the issue of a series of Preferred Stock and does hereby in this Certificate of Designation (the “Certificate of Designation”) establish and fix and herein state and express the designation, rights, preferences, powers, restrictions and limitations of such series of Preferred Stock as follows:

 

1.     Designation. There shall be a series of Preferred Stock that shall be designated as “Series B Convertible Preferred Stock” (the “Series B Preferred Stock”) and the number of Shares constituting such series shall be 25,000. The rights, preferences, powers, restrictions and limitations of the Series B Preferred Stock shall be as set forth herein.

 

2.     Defined Terms. For purposes hereof, the following terms shall have the following meanings:

 

“Articles of Incorporation” has the meaning set forth in the Recitals.

 

“Board” has the meaning set forth in the Recitals.

 

“Certificate of Designation” has the meaning set forth in the Recitals.

 

“Common Stock” means the common stock, no par value, of the Corporation.

 

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“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.

 

“Corporation” has the meaning set forth in the Preamble.

 

“Conversion Factor” means 10,000, subject to adjustment as set forth in Section 7.5

 

“Conversion Shares” means the shares of Common Stock or other capital stock of the Corporation then issuable upon conversion of the Series B Preferred Stock in accordance with the terms of Section 7.

 

“Date of Issuance” means, for any Share of Series B Preferred Stock, the date on which the Corporation initially issues such Share (without regard to any subsequent transfer of such Share or reissuance of the certificate(s) representing such Share).

 

“Junior Securities” means, collectively, the Common Stock and any other class of securities that is specifically designated as junior to the Series B Preferred Stock.

 

“Liquidation” has the meaning set forth in Section 5.

 

“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.

 

“Person” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association or other entity.

 

“Preferred Stock” has the meaning set forth in the Recitals.

 

“Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time.

 

“Series B Preferred Stock” has the meaning set forth in Section 1.

 

“Share” means a share of Series B Preferred Stock.

 

“Subsidiary” means, with respect to any Person, any other Person of which a majority of the outstanding shares or other equity interests having the power to vote for directors or comparable managers are owned, directly or indirectly, by the first Person.

 

“Supermajority Interest” has the meaning set forth in Section 6.2.

 

3.     Rank. With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, all Shares of the Series B Preferred Stock shall rank senior to all Junior Securities.

 

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4.     Dividends. If the Corporation declares or pays a dividend or distribution on the Common Stock, whether such dividend or distribution is payable in cash, securities or other property, including the purchase or redemption by the Corporation or any of its Subsidiaries of shares of Common Stock for cash, securities or property, but excluding (i) any dividend or distribution payable on the Common Stock in shares of Common Stock and (ii) any repurchases of Common Stock held by employees or consultants of the Corporation upon termination of their employment or services pursuant to agreements providing for such repurchase, the Corporation shall simultaneously declare and pay a dividend on the Series B Preferred Stock on a pro rata basis with the Common Stock determined on an as-converted basis assuming all Shares had been converted pursuant to Section 7 as of immediately prior to the record date of the applicable dividend (or if no record date is fixed, the date as of which the record holders of Common Stock entitled to such dividends are to be determined).

 

5.     Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (collectively, a “Liquidation”), the holders of Shares of Series B Preferred Stock then outstanding shall be entitled to participate with the holders of shares of Common Stock then outstanding, pro rata as a single class based on the number of outstanding shares of Common Stock on an as-converted basis held by each holder as of immediately prior to the Liquidation, in the distribution of all assets and funds of the Corporation available for distribution to its stockholders.

 

6.     Voting.

 

6.1     Voting Generally. Each holder of outstanding Shares of Series B Preferred Stock shall be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration (whether at a meeting of stockholders of the Corporation, by written action of stockholders in lieu of a meeting or otherwise), except as provided by law or by the provisions of Section 6.2 below. In any such vote, each Share of Series B Preferred Stock shall be entitled to a number of votes equal to four (4) times the number of shares of Common Stock into which the Share is convertible pursuant to Section 7 herein as of the record date for such vote or written consent or, if there is no specified record date, as of the date of such vote or written consent. Each holder of outstanding Shares of Series B Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in accordance with the Corporation’s bylaws. The holders of outstanding Shares of Series B Preferred Stock having not less than the minimum number of votes that would be necessary to authorize or take any action at a meeting at which all of the Corporation’s shares entitled to vote thereon were present and voted, may consent to such action (including, without limitation, an amendment to the Articles of Incorporation) in writing without the vote or written consent of the holders of shares of Common Stock.

 

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6.2     Other Special Voting Rights. Without the prior written consent of holders of not less than two-thirds of the then total outstanding Shares of Series B Preferred Stock (a “Supermajority Interest”), voting separately as a single class with one vote per Share, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such holders, and any other applicable stockholder approval requirements required by law, the Corporation shall not take, and shall cause its Subsidiaries not to take or consummate, any of the actions or transactions described in this Section 6.2 (any such action or transaction without such prior written consent being null and void ab initio and of no force or effect) as follows: (a) create, or authorize the creation of, any additional class or series of capital stock of the Corporation (or any security convertible into or exercisable for any class or series of capital stock of the Corporation) that ranks superior to or in parity with the Series B Preferred Stock in rights, preferences or privileges (including with respect to dividends, liquidation, redemption or voting); or (b) increase or decrease the number of authorized shares of any series of Preferred Stock or authorize the issuance of or issue any shares of Preferred Stock.

 

7.     Conversion.

 

7.1     Right to Convert. Subject to the provisions of this Section 7, at any time and from time to time on or after the Date of Issuance, any holder of Series B Preferred Stock shall have the right by written election to the Corporation to convert all or any portion of the outstanding Shares of Series B Preferred Stock (including any fraction of a Share) held by such holder into an aggregate number of shares of Common Stock (including any fraction of a share) as is determined by (i) multiplying the number of Shares (including any fraction of a Share) to be converted by the Conversion Factor in effect immediately prior to such conversion.

 

7.2     Procedures for Conversion; Effect of Conversion

 

(a)     Procedures for Holder Conversion. In order to effectuate a conversion of Shares of Series B Preferred Stock pursuant to Section 7.1, a holder shall (a) submit a written election to the Corporation that such holder elects to convert Shares, the number of Shares elected to be converted and (b) surrender, along with such written election, to the Corporation the certificate or certificates representing the Shares being converted, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto) or, in the event the certificate or certificates are lost, stolen or missing, accompanied by an affidavit of loss executed by the holder. The conversion of such Shares hereunder shall be deemed effective as of the date of surrender of such Series B Preferred Stock certificate or certificates or delivery of such affidavit of loss. Upon the receipt by the Corporation of a written election and the surrender of such certificate(s) and accompanying materials, the Corporation shall as promptly as

 

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practicable (but in any event within ten (10) days thereafter) deliver to the relevant holder (a) a certificate in such holder’s name (or the name of such holder’s designee as stated in the written election) for the number of shares of Common Stock (including any fractional share) to which such holder shall be entitled upon conversion of the applicable Shares as calculated pursuant to Section 7.1 and, if applicable (b) a certificate in such holder’s (or the name of such holder’s designee as stated in the written election) for the number of Shares of Series B Preferred Stock (including any fractional share) represented by the certificate or certificates delivered to the Corporation for conversion but otherwise not elected to be converted pursuant to the written election. All shares of capital stock issued hereunder by the Corporation shall be duly and validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof.

 

(b)     Effect of Conversion. All Shares of Series B Preferred Stock converted as provided in this Section 7 shall no longer be deemed outstanding as of the effective time of the applicable conversion and all rights with respect to such Shares shall immediately cease and terminate as of such time, other than the right of the holder to receive shares of Common Stock in exchange therefor.

 

7.3     Reservation of Stock. The Corporation shall at all times when any Shares of Series B Preferred Stock are outstanding reserve and keep available out of its authorized but unissued shares of capital stock, solely for the purpose of issuance upon the conversion of the Series B Preferred Stock, such number of shares of Common Stock issuable upon the conversion of all outstanding Series B Preferred Stock pursuant to this Section 7, taking into account any adjustment to such number of shares so issuable in accordance with Section 7.5 hereof. The Corporation shall take all such actions as may be necessary to assure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Corporation upon each such issuance).

 

7.4     No Charge or Payment. The issuance of certificates for shares of Common Stock upon conversion of Shares of Series B Preferred Stock pursuant to Section 7 shall be made without payment of additional consideration by, or other charge, cost or tax to, the holder in respect thereof.

 

7.5     Adjustment to Conversion Factor and Number of Conversion Shares. In order to prevent dilution of the conversion rights granted under this Section 7, the Conversion Factor and the number of Conversion Shares issuable on conversion of the Shares of Series B Preferred Stock shall be subject to adjustment from time to time as provided in this Section 7.5.

 

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(a)     Adjustment to Conversion Factor and Conversion Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Corporation shall, at any time or from time to time after the Date of Issuance, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Corporation payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Factor in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately increased and the number of Conversion Shares issuable upon conversion of the Series B Preferred Stock shall be proportionately increased. If the Corporation at any time combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Factor in effect immediately prior to such combination shall be proportionately decreased and the number of Conversion Shares issuable upon conversion of the Series B Preferred Stock shall be proportionately decreased. Any adjustment under this Section 7.5(a) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

 

(b)     Adjustment to Conversion Factor and Conversion Shares Upon Reorganization, Reclassification, Consolidation or Merger. In the event of any (i) capital reorganization of the Corporation, (ii) reclassification of the stock of the Corporation (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), (iii) consolidation or merger of the Corporation with or into another Person, (iv) sale of all or substantially all of the Corporation’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 7.5(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, each Share of Series B Preferred Stock shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Conversion Shares then convertible for such Share, be exercisable for the kind and number of shares of stock or other securities or assets of the Corporation or of the successor Person resulting from such transaction to which such Share would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Share had been converted in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the applicable number of Conversion Shares then issuable hereunder as a result of such conversion (without taking into account any limitations or restrictions on the convertibility of such Share, if any); and, in such case, appropriate adjustment shall be made with respect to such holder’s rights under this Certificate of Designation to insure that the provisions of this Section 7 hereof shall thereafter be applicable, as nearly as possible, to the Series B Preferred Stock in relation to any shares of stock, securities or

 

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assets thereafter acquirable upon conversion of Series B Preferred Stock (including, in the case of any consolidation, merger, sale or similar transaction in which the successor or purchasing Person is other than the Corporation, an immediate adjustment in the Conversion Factor to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale or similar transaction, and a corresponding immediate adjustment to the number of Conversion Shares acquirable upon conversion of the Series B Preferred Stock without regard to any limitations or restrictions on conversion, if the value so reflected is less than the Conversion Factor in effect immediately prior to such consolidation, merger, sale or similar transaction). The provisions of this Section 7.5(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions.

 

(c)     Certificate as to Adjustment. As promptly as reasonably practicable following any adjustment of the Conversion Factor, but in any event not later than ten (10) days thereafter, the Corporation shall furnish to each holder of record of Series B Preferred Stock at the address specified for such holder in the books and records of the Corporation (or at such other address as may be provided to the Corporation in writing by such holder) a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

 

8.     Reissuance of Series B Preferred Stock. Any Shares of Series B Preferred Stock redeemed, converted or otherwise acquired by the Corporation or any Subsidiary shall be cancelled and retired as authorized and issued shares of capital stock of the Corporation and no such Shares shall thereafter be reissued, sold or transferred.

 

9.     Notices. Except as otherwise provided herein, all notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent (a) to the Corporation, at its principal executive offices and (b) to any stockholder, at such holder’s address at it appears in the stock records of the Corporation (or at such other address for a stockholder as shall be specified in a notice given in accordance with this Section 9).

 

10.     Amendment and Waiver. No provision of this Certificate of Designation may be amended, modified or waived except by an instrument in writing executed by the Corporation and a Supermajority Interest, and any such written amendment, modification or waiver will be binding upon the Corporation and each holder of Series B Preferred Stock; provided, that no amendment, modification or waiver of the terms or relative priorities of the Series B Preferred Stock may be accomplished by the merger,

 

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consolidation or other transaction of the Corporation with another corporation or entity unless the Corporation has obtained the prior written consent of the holders in accordance with this Section 10.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

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In Witness Whereof, this Certificate of Designation is executed on behalf of the Corporation by as of September 4, 2020.

 

 

 

NovAccess Global Inc.

 

 

/s/ Daniel G. Martin

By Daniel G. Martin

Chairman and Chief Executive Officer

 

 

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Exhibit 10.1

 

MANAGEMENT SERVICES AGREEMENT

 

This MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is made and entered into as of September 4, 2020 for services begun June 2, 2020 (the “Effective Date”), by and between TN3 LLC, a Wyoming limited liability company (the “Service Provider”), and NovAccess Global Inc., a Colorado corporation (together with its subsidiaries, the “Company”). Service Provider and the Company are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

WHEREAS, the Company desires to retain Service Provider to provide certain operational and administrative services to the Company, and Service Provider is willing to provide such services to the Company, upon the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, the terms and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

 

1. Retention of Service Provider; Services. The Company hereby retains Service Provider, and Service Provider hereby agrees, to provide to the Company certain operational and administrative support services (the “Services”) which include, without limitation, the following:

(i) providing the Company’s headquarters at 8834 Mayfield Road, Suite C, Chesterland, Ohio 44026 , or at another location in Geauga County, Ohio (the “Office”),

(ii) all necessary business supplies for use at the Office,

(iii) use of communication systems,

(iv) use of information systems services,

(v) graphic design services,

(vi) website and email design, creation, hosting, and maintenance,

(vii) corporate marketing services support (not to include investor relations),

(viii) creation and management of cross-platform social media presence,

(ix) reception services including mail, messaging, and administrative coordination,

(x) non-strategic execution of administrative financial support including banking, online banking, paperwork completion (excluding legal, excluding communications and filings related to Securities and Exchange Commission),

(xi) bookkeeping, and

(xi) such other management and administrative services which the Parties shall mutually determine are necessary for the efficient operation of the Company’s business and affairs.

The Parties agree that the Services shall be provided by the Service Provider or via third party arrangements by Service Provider.

 

2. Relationship of the Parties. At no time shall the employees or independent contractors engaged by Service Provider and/or the employees of any such

 

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independent contractors be considered employees of the Company. Service Provider shall be responsible for complying with all federal, state and local labor and tax laws and regulations with respect to its employees and independent contractors. This Agreement is not one of agency between Service Provider and the Company, but one in which Service Provider is engaged to provide management oversight and administration support services as an independent contractor. All employment arrangements are therefore solely Service Provider’s concern, and the Company shall not have any liability with respect thereto except as otherwise expressly set forth herein.

 

3. Duties of Service Provider.

 

3.1 Service Provider will perform, or cause to be performed, the Services hereunder with not less than the degree of care, skill and diligence with which it performs or would perform similar services for itself consistent with past practices (including, without limitation, with respect to the type, quantity, quality and timeliness of such services). If the Service Provider is required to engage third parties to perform one or more of the Services required hereunder, Service Provider shall use all commercially reasonable efforts to cause such third parties to deliver such Services in a competent and timely fashion.

 

3.2 Service Provider shall maintain books, records, documents and other written evidence, consistent with its normal accounting procedures and practices, sufficient to accurately, completely and properly reflect the performance of the Services hereunder and the amounts due in accordance with any provision of this Agreement.

 

4. Term.

 

4.1 The term of this Agreement shall commence as of the Effective Date and shall continue in effect for three years (the “Initial Term”), and thereafter shall be automatically renewed upon the same terms and conditions set forth herein for subsequent one year terms (each, a “Renewal Term”) unless Service Provider or the Company gives notice in writing within 90 days before the expiration of the Initial Term or any Renewal Term of its desire to terminate this Agreement; provided, however, that either the Company or Service Provider will have the right to terminate this Agreement following a breach of a material term of this Agreement by the other party hereto and a failure to cure such breach within 30 days following written notice thereof. The Initial Term and any Renewal Terms are referred to herein collectively as the “Term”.

 

4.2 Notwithstanding Section 4.1, the Parties agree that this Agreement will terminate upon (i) the liquidation or dissolution of the Company, (ii) the sale of all or substantially all of the assets of the Company to a third party or (iii) the sale of control the Company, whether by sale of membership interests, merger, reorganization, consolidation or otherwise, to a third party.

 

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5. Compensation.

 

5.1 Flat Fee. As consideration for the performance of the Services, the Company shall pay Service Provider a flat fee of $30,000 per month. Any services provided outside the scope of this contract must be approved in writing by the Company, and will be detailed separately as expenses (the “Expenses”).

 

5.2 Payment. Service Provider will deliver a monthly invoice (the “Invoice”) to the Company as soon as practicable following the end of each month for the month or the period last ended or, in the case of expiration or termination, all unbilled Expenses. The Company shall pay the Invoice within 30 days of receipt of such Invoice; provided, however, that if there is a dispute between the Parties regarding any Invoice, they shall cooperate amicably to promptly determine the correct amount of Expenses payable to Service Provider. Interest at the rate of 12% per annum, compounded monthly, will accrue and will be payable with respect to any amounts due and not paid by the Company until such amounts, and any interest thereon, have been paid.

 

5.3 Form of Payment. Each cash payment made pursuant to this Agreement will be paid by wire transfer of immediately available federal funds to such account as Service Provider may specify to the Company in writing prior to such payment.

 

6. Confidentiality. Service Provider shall, and shall cause its officers, directors, managers, principals, members, employees including employees, agents and representatives (collectively, “Representatives”) to, maintain the Company’s confidential information in confidence and not use it for any purpose other than providing the Services.

 

7. Exculpation and Indemnification.

 

7.1 Scope. Service Provider and its Representatives shall be entitled to the same rights with respect to exculpation and indemnification as any director, officer, or covered person would be entitled under the Company’s articles of incorporation or bylaws.

 

7.2 Rights of Indemnification; Survival. The rights of indemnification provided in this Section 7 shall be in addition to any rights to which a party entitled to indemnification under Section 7.1 may otherwise be entitled by contract or as a matter of law, and shall extend to each of such party’s heirs, successors and assigns. The provisions of this Section 7 shall survive the termination of this Agreement.

 

8. Assignment. Neither Party may assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other Party, provided that Service Provider may assign its obligation to provide Services under this Agreement.

 

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9. Choice of Law. Except as set forth below, this Agreement shall be construed and interpreted, and the rights of the Parties shall be governed by, the internal laws of the State of Ohio, without giving effect to conflicts of laws rules and principles that require the application of the laws of any other jurisdiction.

 

10. Entire Agreement; Amendments and Waivers. This Agreement, together with all Schedules hereto, constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the Parties, and there are no other warranties, representations or other agreements between the parties in connection with the subject matter hereof. No amendment, supplement, modification or waiver of this Agreement shall be binding unless executed in writing by all Parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless expressly agreed to in writing by the affected Party.

 

11. References; Headings; Interpretation. All references in this Agreement to Exhibits, Articles, Sections, subsections and other subdivisions refer to the corresponding Exhibits, Articles, Sections, subsections and other subdivisions of or to this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections or other subdivisions of this Agreement are for convenience only, do not constitute any part of this Agreement, and shall be disregarded in construing the language hereof. The words “this Agreement,” “herein,” “hereby,” “hereunder” and “hereof” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The words “this Article,” “this Section” and “this subsection” and words of similar import refer only to the Article, Section or subsection hereof in which such words occur. The word “or” is not exclusive, and the word “including” (in its various forms) means “including, without limitation.” Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

 

12. Notices. Unless otherwise provided herein, any notice, request, consent, instruction or other document to be given hereunder by any Party hereto to another Party hereto shall be in writing and will be deemed given: (a) when received, if delivered personally or by courier; or (b) on the date receipt is acknowledged, if delivered by certified mail, postage prepaid, return receipt requested; or (c) one day after transmission, if sent by facsimile or electronic mail transmission with confirmation of transmission, as follows:

 

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If to the Company:

 

XsunX Inc.

8834 Mayfield Rd., Suite C

Chesterland, OH 44026

Email: dmartin@novaccessglobal.com

Attention: Mr. Daniel Martin

 

With a copy (which shall not constitute notice) to:

 

Kohrman Jackson & Krantz PLL

1375 East 9th Street

29th Floor

Cleveland, OH 44114-179

Email: cjh@kjk.com

Attention: Mr. Christopher Hubbert

 

If to Service Provider:

TN3 LLC

8834 Mayfield Rd.

Chesterland, OH 44026

Email: tn3llc@gmail.com

Attention: President

 

13. Counterparts. This Agreement may be executed in one or more counterparts, including by facsimile and portable document format (.pdf) delivery, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. The Parties agree and acknowledge that delivery of a signature by facsimile or in .pdf form shall constitute execution by such signatory.

 

14. Invalidity. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument, and such invalid, illegal or unenforceable provision shall be interpreted so as to give the maximum effect of such provision allowable by law.

 

15. Additional Documents. Each of the Parties hereto agree to execute any document or documents that may be requested from time to time by the other Party to implement or complete such Party’s obligations pursuant to this Agreement and to otherwise cooperate fully with such other Party in connection with the performance of such Party’s obligations under this Agreement.

 

16. Successors and Assigns. Except as herein otherwise specifically provided, this Agreement shall be binding and inure to the benefit of the Parties and their successors and permitted assigns.

 

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17. No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Parties hereto and their successors and assigns permitted under this Agreement, and no provisions of this Agreement shall be deemed to confer upon any other persons any remedy, claim, liability, reimbursement, cause of action or other right except as expressly provided herein.

 

18. No Presumption Against Any Party. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any Party, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the Parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all Parties hereto.

 

19. Specific Performance. The Parties acknowledge and agree that any Party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, the Parties agree that any Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof as set forth in Section 20.

 

20. Arbitration.

 

20.1 Any dispute, controversy or claim arising out of, connected with, or relating to this Agreement, including without limitation any dispute as to the existence, validity, construction, interpretation, negotiation, performance, breach, termination or enforceability of this Agreement (a “Dispute”) shall be resolved by final and binding arbitration before a single independent and impartial arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect. The AAA Optional Rules for Emergency Measures of Protection shall also apply. If the Parties are unable to agree on a mutually acceptable arbitrator within 15 days of the submission of the Dispute to arbitration, the arbitrator shall be appointed by the AAA. The Parties acknowledge that arbitration is intended to be a more expeditious and less expensive method of dispute resolution than court litigation. The award of the arbitrator shall be in writing and provide reasons for the award. The arbitrator must certify in the award that such award conforms to the terms and conditions set forth in this Agreement, including that such award has been rendered in accordance with the applicable governing law. The arbitrator shall have the authority to assess the costs and expenses of the arbitration proceeding (including the fees and expenses of the arbitrator and the AAA) against any or all of the Parties. The arbitrator shall also have the authority to award reasonable attorneys’ fees and expenses to the prevailing Party. The place of arbitration shall be Cleveland, OH unless another location is mutually agreed upon by the Parties to such arbitration. The award of the arbitrator shall be binding on the Parties, and the award may, but need not, be entered as judgment in a court of competent jurisdiction. This agreement to arbitrate shall not preclude the Parties from engaging in parallel voluntary, non-binding settlement efforts including mediation.

 

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20.2 The arbitrator may, unless consolidation would prejudice the rights of any Party, consolidate an arbitration hereunder with arbitration(s) if the arbitrations raise common questions of law or fact. If two or more arbitral tribunals under these agreements issue consolidation orders, the order issued first shall prevail.

 

20.3 The Parties undertake to keep confidential all awards in their arbitration, together will all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a Party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a court or other judicial authority.

 

20.4 Arbitration shall be the exclusive dispute resolution mechanism hereunder; provided that nothing contained in this Section 20 shall limit any Party’s right to bring (i) an application to enforce this agreement to arbitrate, (ii) actions seeking to enforce an arbitration award or (iii) actions seeking injunctive or other similar relief in the event of a breach or threatened breach of any of the provisions of this Agreement (or any other agreement contemplated hereby). The specifically enumerated judicial proceedings shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate and, each party irrevocably and unconditionally (and without limitation): (i) submits to and accepts, for itself and in respect of its assets, generally and unconditionally the non exclusive jurisdiction of the courts located in Geauga County, Ohio of the United States and the State of Ohio, (ii) waives any objection it may have now or in the future that such action or proceeding has been brought in an inconvenient forum, (iii) agrees that in any such action or proceeding it will not raise, rely on or claim any immunity (including, without limitation, from suit, judgment, attachment before judgment or otherwise, execution or other enforcement), (iv) waives any right of immunity which it has or its assets may have at any time, and (v) consents generally to the giving of any relief or the issue of any process in connection with any such action or proceeding including, without limitation, the making, enforcement or execution of any order or judgment against any of its property. IN ENTERING INTO THE ARBITRATION PROVISION OF THIS SECTION 20, EACH PARTY TO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL, INCLUDING ANY RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT REFERENCED HEREIN OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.

 

 

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first written above.

 

     

COMPANY:

 

NovAccess Global Inc.

   

By:

 

/s/ Daniel G. Martin

Name:

 

Daniel G. Martin

Title:

 

CEO

 

 

     

SERVICE PROVIDER:

 

TN3 LLC 

   

By:

 

/s/ Daniel G. Martin

Name:

 

Daniel G. Martin

Title:

 

President

 

 

 

 

 

Signature Page to Management Services Agreement

8

Exhibit 99.1

 

NovAccess Global Acquires StemVax Therapeutics from Innovest Global

 

Acquisition Launches NovAccess Shift, Focusing on Diagnostics and Therapeutics in Cancer 

 

CLEVELAND, OH – September 9, 2020 – NovAccess Global, Inc. (OTC: XSNX), today announced that it has acquired 100% ownership of Pasadena-based StemVax Therapeutics from Innovest Global (OTC: IVST).

 

StemVax is a translational biotechnology company developing novel immunotherapies for brain tumor patients, featuring recently approved United States patent #US9764014B2. The patent is granted under the category of “Cancer Antigens”, and related to the “treatment of cancer using vaccination therapy”. 

 

StemVax Glioblast (SVX-GB) is a cancer vaccine, which is a medication that stimulates or restores the immune system’s ability to fight an existing cancer by strengthening the body’s natural defenses against the cancer cells. It is a meaningful technology, which could significantly improve the quality of life and prognosis for the many people who suffer from brain tumors. More information can be found at www.stemvax.com. 

 

“This acquisition is a milestone event for NovAccess, marking the foundation of our growing platform Company,” said Dan Martin, NovAccess Founder and Chairman of the Board of Directors. “With this acquisition complete, we will onboard the StemVax team, launch their brand and work towards the commercialization of StemVax’s life-changing technologies. This is truly the beginning of an effort that encompasses the lifelong work of some of the most talented and incredible people I’ve ever met. I couldn’t be more humbled or thankful to welcome the StemVax team to NovAccess.”

 

The transaction structure features the issuance of 7.5 million common restricted shares of NovAccess Global stock to Innovest Global as consideration. The disposition by Innovest allows it to direct all of its focus on its growing industrials business, while retaining upside potential should NovAccess be successful in its commercialization efforts.   

 

 

 

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this press release are forward-looking statements. These statements relate to future events or to the Company's future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company's control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Such risks, uncertainties and other factors, which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the OTC Markets. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

 

Investor Contact:

 

Chris Tyson
Executive Vice President
MZ Group - MZ North America
949-491-8235
IVST@mzgroup.us
www.mzgroup.us